Recession with a Good Jobs Report and Bad Policies

By
M DOWLING
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1
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Can you have a recession with jobs? We are fortunate that the jobs report is good and the unemployment rate is at 3.6%. To Stuart Varney in the clip below, it looks like the economy is not in recession. It’s new territory.

However, one must keep in mind that white collar jobs are not doing well. The jobs are not necessarily good jobs. The other problems are Team Biden’s policies are to spend more (on socialist welfare) and destroy fossil fuels. That is why we have the problems we have. Those policies will continue.

Despite a strong jobs report, soaring natural gas and electricity prices are forcing industrial and manufacturing plants to close at an alarming rate.

The soaring energy prices are manufactured by Democrat policies eliminating fossil fuels with nothing to take its place. Unemployment at 3.6% isn’t everything.

Bloomberg reports that domestic natural gas prices jumped 300% in June and forecasts electricity rates for industrial plants to hit a record high before summer ends. Plants in Europe are in a worse predicament with natural gas jumping 700% in recent months and electricity rates well into record territory.

Europe’s fertilizer plants, steel mills, and chemical manufacturers were the first to succumb. Massive paper mills, soybean processors, and electronics factories in Asia went dark.

Century Aluminum Co. stock is plunging
As Bloomberg reports:

Now soaring natural gas and electricity prices are starting to hit the US industrial complex.

On June 22, 600 workers at the second-largest aluminum mill in America, accounting for 20% of US supply, learned they were losing their jobs because the plant can’t afford an electricity tab that’s tripled in a matter of months.

Century Aluminum Co. says it’ll idle the Hawesville, Kentucky, mill for as long as a year, taking out the biggest of its three US sites. A shutdown like this can take a month as workers carefully swirl the molten metal into storage so it doesn’t solidify in pipes and vessels and turn the entire facility into a useless brick. Restarting takes another six to nine months. For this reason, owners don’t halt operations unless they’ve exhausted all other options.

Manufacturing overtime hours have already declined for three straight months, the longest downward stretch since 2015, and a measure of US manufacturing activity weakened in June to a two-year low as new orders contracted. A week after Century’s announcement, the nation’s largest aluminum producer Alcoa Corp. said it’s closing a third of its production at a mill in Indiana because of “operational challenges.”

Watch the talk of 3.6%:

Squawk Box Is Optimistic after the 3.6% report

Watch the Trade Deficit

The rising trade deficit narrowed in May due to rising interest rates. It cooled demand for goods. A trade deficit simply means the US imports exceed the number of exports. As interest rates go up, people can’t afford to buy.

The huge deficit with Russia is curtailed. It was insane at $1,049,100,000 in the month of May.

Chief economist for Tressis, Professor Dan Lacalle, says, “You know the US trade balance is in trouble when record energy exports make the trade deficit shrink modestly to $85.5bn, from $86.7bn, despite a 1.2% m/m rise in exports.”

Imagine if we start shedding jobs too? So, in answer to the question, can we have a recession with a good job report – it’s complicated.

There is a limit as to how long Team Biden can abuse our economy.

It could be a run-up to the recession despite the 3.6%.

Ron Paul prediction.


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