Rate Cut Crisis Barely Dodged With New Jobs Numbers

Just a few days ago, it seemed that the US was on the verge of a recession. While the long-term trajectory is still one that is far too tenuous to rely on, the recent jobs report seems to suggest that the US is not headed for immediate recession. Although the status of the US in the short term is somewhat stabilized, we must be thankful that the jobs data was not used to guarantee a worse long-term outcome. Poor economic statistics are often a good measure of the economy’s state, yet they are consistently used to justify far more drastic antirecessionary measures that greatly damage people’s ability to meaningfully make good constrained choices. The recent reversal of job data from almost recession-level statistics is just one example of many situations that could have been used to sink us into an even deeper approach to our inflationary spiral.

The Fed will attempt to take advantage of any crisis. Whether covid or jobs data, any situation that can be made to seem “not normal” will be used to justify expansionary monetary policy and higher spending. The jobs data, while just one of many indicators of the economy might not be performing at a high level, seriously influenced speculation that the Fed would cut rates once more.  Even from within, the Fed would have only needed one more month of similar jobs data to certify a full-blown recession and start justifying the same cuts that Trump has been begging for all along. While drastic cuts can cause panic just by their extreme reactionary nature, they are usually justified through convincing us that the other situation is more drastic. Crisis repeatedly resets the time horizon from long-term into the present and slowly ensures more guaranteed future consequences justified by a short-term gamble to avoid disaster. Not every “crisis” will be cut short like the recent jobs data, but lesser things have been used to justify actions with permanent consequences. …