June 22, 2021

The US economy is broken and the Fed can”t fix it

(MENAFN – Asia Times) During the stagflation of the 1970s, economists devised a ”discomfort index,” which simply added the unemployment rate to the inflation rate. In the Chart of the Day we average two of the Philadelphia Federal Reserve’s diffusion indices for economic bottlenecks: prices paid for inputs, and unfilled orders.
The proportion of respondents in the Philly Fed’s survey reporting more unfilled orders is the highest since 1973, and the proportion reporting higher input costs is the highest since May 1974, just after the price of oil quadrupled.
That’s what happens when you throw $5 trillion of demand into an economy that hasn”t invested in capital stock and infrastructure for more than a decade. The supply chains are creaking and breaking, and there’s no quick TO READ THE FULL STORY {{ sharing.sharer }} paid $1.00 to share this…

Read full article here: menafn.com