Despite First Signs Of Easing, Inflation Spiking Food/Energy Prices May Cause Recession

Despite First Signs Of Easing, Inflation Spiking Food/Energy Prices May Cause Recession

We live in a highly interconnected world, not only via internet, but economically. The Russian aggression and subsequent sanctions are going to have worldwide economic consequences, none of them positive. Add to that the already weakening U. S. economy and a Fed just beginning its tightening cycle, and you have the makings of recession. The employment data for February came in better than expected with the Payroll (Establishment) Survey bouncing +678 (consensus estimate: +423K). The Household Survey rose a similar +548K. The headline Unemployment Rate (U3) fell to 3. 8% from 4. 0%, but the broader (U6) measure, which includes those working part-time, wanting full-time but unable to find it, and most likely a better indicator of labor market conditions, rose slightly to 7. 2% from 7. 1%. That indicates that the labor market isn't as "tight" as the U3 rate would imply. Corroborating that view was the rise in the Labor Force Participation Rate (LFPR), something we've forecast for the past few months. (The LFPR is the percentage of working age population either with a job or looking for one.) It rose to 62. 3% in February, closing in on the 63. 4% pre-pandemic level. This gauge was as