260. 7 Keys to What the Jobs and Inflation Reports Don’t Tell YOU | This Week's Economy Ep. 65 🎙️

Unpacking Persistent Inflation, Housing Market Challenges, and Necessary Economic Reforms.

Hello Friends!

Welcome to Episode 65 of "This Week's Economy." I'm your host, Dr. Vance Ginn, president of Ginn Economic Consulting, contributor at 15 free-market think tanks, and former chief economist of the White House’s Office of Management and Budget.

Watch my podcast here or find it on Apple Podcast, Spotify, or your favorite podcast platform.

Today, we're diving into key national and state economic issues, including the latest insights on inflation, the Federal Reserve's policies, the Texas GOP platform, and more. Let’s jump into it:

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1.📊 Latest Jobs Report Insights: The latest jobs report presents a mixed picture of the labor market for May 2024. Despite headline job growth of 272,000 for a 1.8% growth rate over the last year, there are significant underlying issues:

• Full-time jobs have been declining while part-time jobs are increasing, indicating a continued shift in job quality.

• The labor force participation rate declined to 62.5%, and the unemployment rate increased to 4%, though it would have been closer to 6% had so many people not dropped out of the labor force.

• The report shows government jobs (2.7% y/y) continue to outpace the growth of private sector jobs (1.6% y/y), indicating a crowding-out effect on the productive private sector.

• Real wage growth continues to lag behind inflation by 2.2% for average hourly earnings and 3.9% for average weekly earnings since January 2021, when Biden took office, reducing purchasing power. Read more.

2.📝 ESG Research in Oklahoma: My new co-authored study at the American Energy Institute (where I am now a senior fellow) titled "Fact vs. Fiction: The Impact of ESG Policies in Oklahoma" reveals significant costs associated with ESG activity. The study shows that the recent law in Oklahoma stopping public pensions and municipality bonds from using taxpayer money to adhere to ridiculous ESG policies did not cause higher interest rates on the bonds and has had lower returns for pensions. This is fine for voluntary decisions in the private sector but not with taxpayer money. Read the full study and my thoughts on it.

3.📈 Latest CPI Inflation Report: The Consumer Price Index (CPI) report indicates persistent inflation, a significant economic concern. The latest data shows that prices increased by 3.3% year-over-year, with core inflation (excluding food and energy) rising by 3.4%. The Federal Reserve's response has been slow, and their actions are still not enough to curb the inflationary pressures we face. We must understand the full extent of these inflationary pressures and how they affect our daily lives. While the inflation rate has moderated, it still remains well above the 2% rate preferred by the Fed, but really, the rate should be 0% or even declining, given the excessive inflation over the last few years. Read more.

4.🏦 Fed Behind the Curve: The Federal Reserve remains behind the curve, failing to address the root causes of inflation adequately. This has significant implications for economic growth and interest rates. For example, the Fed's delayed response has contributed to volatility in the bond markets and increased uncertainty for investors. The Fed decided to keep its federal funds rate target range unchanged between 5.25-5.5%, although it should have announced a larger monthly reduction in its bloated balance sheet. Read more and check out my thoughts under the paywall.

5.📝 Texas GOP Platform and Priorities: The Texas GOP's platform and legislative priorities are crucial, but they miss out on key areas that need attention. Their current platform includes important issues but overlooks critical areas like fiscal discipline and regulatory reforms that could drive more significant economic growth and freedom. For example, while the platform addresses tax cuts, it needs stronger measures to control government spending and reduce regulatory burdens on businesses. More insights on what's missing and what needs to be addressed for effective policy-making can be found here and additional thoughts under paywall.

6.👨‍💼 Gen Z's Economic Performance: Interestingly, Gen Z is outperforming other generations in inflation-adjusted terms. This week, I highlighted how Gen Z's unique position in the labor market and their spending habits are helping them navigate these tough economic times better than their predecessors. For example, despite high student debt, Gen Z has adapted by pursuing gig economy jobs and remote work, allowing for greater flexibility and resilience. This perspective offers a fresh look at how different generations cope with current economic challenges. Read more.

7.💼 New FDIC Chair’s Role: The incoming FDIC chair has a significant task ahead. Beyond just cleaning houses, they need to focus on removing barriers to banking and enhancing competition in the financial sector. This week, I shared my thoughts on what the new FDIC leadership should prioritize to ensure a more robust and competitive banking environment. For example, regulatory reforms that reduce compliance costs for small and mid-sized banks could spur innovation and increase consumer choice. Read more.

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Media Hits and Events:

📃 Article on Protectionism: My latest article at the American Institute for Economic Research discusses why protectionism moves us closer to socialism. This piece highlights the dangers of protectionist policies and argues for more open markets to drive economic prosperity. Read the article.

🎤 Interviews:

• Nick Craig Morning Show: Discussed the Fed's recent decision and its economic implications.

• Fox Business with Cavuto: Coast to Coast: Analyzed the latest inflation data and the Federal Reserve's actions.

• Fox Business Mornings with Maria: Discussed the latest jobs report and its economic implications.

• KTRH News Houston: Talked about housing affordability issues, particularly the impact of rising homeowners insurance and property taxes.

• Tommy Tucker in Louisiana: Discussed the state of Louisiana's economy and potential improvements. Listen to the interview.

• C-SPAN Washington Journal: Discussed inflation and Biden's economic policies. Watch the interview.

• Podcast with Newt Gingrich: Recorded an interview for his show, which will be posted soon.

• The John Whitmer Show: Upcoming discussion on why the STAR Bonds for the Chiefs and possibly the Royals stadiums is a bad idea.

• Interview with KTRH News Houston: I discussed various economic issues and policy solutions. Listen to the interview.

Let People Prosper Show

Don't miss the latest episode of the Let People Prosper Show, Episode 100, with Dr. Norman Horn on the future of liberty! Click here.

259. What Should Be the Future of Liberty? with Dr. Norman Horn | Celebrating the 100th Let People Prosper Episode🎉

The upcoming Let People Prosper Show on Monday will be Episode 101 with Dr. Robert Gmeiner of Methodist University on the failures of the Federal Reserve and how it is crushing our future.

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