Powell Made A Big Mistake: Record Plunge In Job-Finding Rate Hints At Unemployment Surge, Looming Recession

One of the best reactions to Fed's ridiculous hawkish pivot yesterday, where the highly politicized central bank decided to turn bizarrely hawkish less than three months after it did a jumbo 50bps cut to "fend off a recession" as political activist and nevertrumper Bill Dudley put it, but really just to boost Kamala's odds of election, belonged to Std Chartered FX strategist Steve Englander who said "the real question is if you are going to be so hawkish, why bother cutting" (full note here). Indeed... but an even better question is what changed so dramatically in just three months for the Fed to go from raging dove to belligerent hawk (yes, yes, we know Trump wont the election, it's rhetorical).

Yet the best question of all is the following: did the Fed make another catastrophic policy decision (remember "inflation is transitory" and, more recently, "fending off a recession") and yet again mistime its hawkish pivot. The answer, it turns out, is a resounding yes, not because of any unreliable statistics provided by the corrupt and complicit Biden government, where we now know that every incremental data point is a farcically lie (and not only that near record 818K downward revision to jobs which we correctly predicted, but more recently, our explanation how "Biden Lied About Everything: Philly Fed Finds All Jobs "Created" In Q2 Were Fake") but because of objective, third-party labor market trackers, which confirm that the labor market just imploded.

As Goldman economist Manuel Abecasis writes in a recent note, the job-finding rate of unemployed workers — the share of unemployed workers in one month who become employed in the subsequent month — fell 7% since September to 21% the largest two-month decline on record (the only exception was the outlier economic collapse in 2020 when the entire world shut down) and the lowest rate since 2014!