The November Unemployment rate remained at 3.7%. This was the same rate recorded in October of this year.
Wages rose 5.1% as compared to the same period a year ago. This has most economists worried about how long companies can sustain this type of wage growth.
Under normal conditions, wages only rise around 3% annually.
The continued strength of the labor market tells us that the interest rate increases by the Fed will certainly continue. The Fed Chairman had signaled that they might only raise their benchmark Fed Funds rate at the next meeting by 50 basis points.
But that was before this strong jobs report came out. Many are now expecting the Fed to do another 75 basis point increase.
The markets have already responded negatively to this news. We’ll see what happens at the next Federal Reserve meeting.
Let me leave you with this.
Our Lame Duck Congress is preparing a last ditch effort to spend even more money before they lose power. Funding for the Federal Government is set to expire on December 16th.
Without a funding package being passed the government will shut down. The problem is that the new administration wants all twelve of their stalled legislative packages added to the funding bill before the new Congress is sworn in on January 3rd.
The packages they’re trying to jam into this last ditch effort include the American Rescue Plan, another infrastructure bill, last year’s omnibus, a veteran’s fund, food stamp and healthcare increases, semiconductor subsidies, the rest of the Inflation Reduction Act, and student loan forgiveness. Last year’s additional spending came to an increase of 6.7%.
If all of these stalled bills pass, it would mean an additional spending increase of 10.3% this year. And if they don’t get what they want, they’ve promised that no funding package will be passed with a government shutdown sure to follow.
I realize that you don’t need to go to B School in order to be a law maker, but their answer to a failing economy racked with inflation is to spend even more money. By definition, if these packages were to pass, it would do nothing but further worsen inflation and our economy as a whole.
The abject stupidity of holding our economy hostage so that they can spend even more money is nothing less than absolute. We can only hope that reasonable people understanding the most basic principles of economics will prevail.
We’re all going to get through this. Let’s get through it together.
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Chris Amundson
President
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