Category Archives: Silver

(Kitco News) Russia is proposing its own international standard for precious metals after getting banned by the London Bullion Market Association (LBMA). And it could have a fixed price in national currencies.
The country’s Finance Ministry said it is “critical” to create the new Moscow World Standard (MWS) to “normalize the functioning of the precious metals industry” and have an alternative to the LBMA.
“The basis of this new structure will be a new, specialized international precious metals brokerage headquartered in Moscow, which will rely on the MWS,” the Finance Ministry said in a letter quoted by Russian media.
Russia is also proposing to fix prices of precious metals in the national currencies of key member countries or via a new monetary unit — such as the new BRICS currency proposed by Russia’s President Vladimir Putin.
The price-fixing committee would include central banks and other large banks from the Eurasian Economic Union (EEU). Member states of the EEU are Russia, Kazakhstan, Belarus, Kyrgyzstan, and Armenia.
The idea would be to make membership attractive to big gold players like China, India, Venezuela, Peru, and other South American countries.
According to the letter published by the Finance Ministry, the creation of such an organization would quickly destroy the monopoly of the LBMA and ensure the stable development of the precious metals industry in Russia and around the world.
It was also clarified that the proposal for the new standard did not originate from the Finance Ministry but was received from market participants.
According to the Finance Ministry, Russia was the second highest gold producer by volume in 2021, with gold output rising by 9% to 343 tons. Russia is also one of the three largest producers of platinum, palladium and rhodium. The precious metals industry in Russia accounts for around $25 billion a year.
Following Russia’s invasion of Ukraine, the LBMA suspended its accreditation of Russian precious metals refiners, barring them from selling new products in London. The suspension was made official on March 7.
The Finance Ministry said that the action paralyzed Russia’s precious metals activities and was a critical negative factor.
This contradicts what many analysts have dubbed a largely symbolic move by the LBMA. Continue reading →

Gold and silver deliveries on the Comex have surged since March 2020. While delivery volume in 2021 and 2022 are below the massive amount seen in 2020, overall volume is very elevated compared to pre-Covid levels.This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.Registered = Warrant assigned and can be used for Comex delivery, Eligible = No warrant attached – owner has not made it available for delivery.Current TrendsDelivery activity is tracked monthly and recently showed a major surge in volume for August gold.A “delivery” on the Comex means that a trader is short a futures contract but (presumably) holds physical metal at the Comex with a warrant assigned. This warrant is reassigned to a long contract holder when they “take delivery” by making their intentions known and then posting the full amount of the contract based on the bar weight (not all bars are exactly 100oz).Current margin requirements are $6,500 for every 100 ounces of gold (about 3.5%). Thus, when someone takes delivery, they post the remaining $173.5k and the warrant becomes theirs, but the metal stays within a Comex vault. To take physical delivery, the warrant holder must then arrange to load out the metal. Otherwise, the metal stays within a Comex vault, and the holder is charged storage fees.While Comex deliveries have been very elevated for over two years, most of the metal was going back and forth within the Comex vaults. There was not a major extraction of metal. In fact, at the beginning of Covid, a dislocation in the market brought a massive surge of inventory into Comex gold vaults (see figure 1 below), even while delivery volume was breaking records.In 2021, gold did start physically moving out of the vault, albeit from much higher stock levels. After a decent amount was extracted, there was then an inventory surge during the Ukraine/Russia crisis to replenish stock. However, that surge has been completely undone and inventories are now well below where they were before May, though well above pre-Covid levels. Since May 2022, total inventories are down 17.7% and down 24.9% since February 2021. The past few months have seen a major acceleration of gold leaving the Comex. This is shown below with the big spike down on the right side.Figure: 1 Historical Eligible and RegisteredSilver is also seeing a major change in inventory. Unlike gold, the metal has not yet started leaving the Comex system in droves, but the amount of Registered has fallen off a cliff (Registered is metal available for delivery). Silver Registered is down 41% since March 15, 2022, and down 65.7% since Feb 4, 2021, which was the start of the Reddit Silver Squeeze last year.This is a massive drawdown in metal available for delivery. For now, the metal is staying in the Comex vaults, but if gold is a leading indicator, metal might start leaving Eligible in a big way. As can be seen below, the amount of Registered has fallen to 16.6%, down from 40% in 2020. This is the lowest ratio since June 2017.Figure: 2 Historical Eligible and RegisteredGoldZooming in on the month-over-month change shows the acceleration in metal leaving the vault. 3.7M ounces were added in March and April. Since then, 6.6M ounces have left the Comex system. Current outflows have exceeded the outflows during the height of the squeeze in 2021.Figure: 3 Recent Monthly Stock ChangeThe daily activity since the last stock report shows a very steady outflow of metal from both Registered and Eligible. This has not been one or two days of big outflows; it has been a relentless removal day after day. Last Friday was the only day of net inflows over the last month.Figure: 4 Recent Monthly Stock ChangeSilverAgain, the action in silver is a bit more nuanced. Investors are taking delivery and then moving Registered metal to Eligible. They are taking it out of the available supply for delivery but are still keeping it in the Comex system. If the current pace keeps up, eventually that silver will start to leave the system.Figure: 5 Recent Monthly Stock ChangeThe daily activity is a bit more erratic in silver than in gold. July saw a very continuous outflow of Registered, but since August started the outflows have been in Eligible with Registered remaining fairly flat.Figure: 6 Recent Monthly Stock ChangeThe table below shows the changes over more standard time periods.GoldIn the last week, Eligible lost 3.4%!Over the last month, gold has lost 8.8% of total stock, spread evenly between Eligible and RegisteredOver the last year, total inventory is down 16.5% with Registered down 19.6%More than half the YoY net outflows in gold have occurred in the last month!SilverSilver Registered is down by 11% in the last month aloneThe last week has been very quietOver the last year, Registered has lost over 50M ounces or 48.5%A repeat of the last year would see Comex Registered fully exhausted!Figure: 7 Stock Change SummaryThe next table shows the activity by bank/Holder. It details the numbers above to see the movement specific to vaults.GoldOver the last month, outflows have been spread across all the vaultsMalca and Manfra have been hit particularly hard, losing +24% eachOver the last year, Malca and Manfra have lost 53% and 30% respectivelySilverSilver MoM saw only one vault increase inventories with 5 vaults shedding more than 5% of inventoryFour vaults lost over 1m ounces in the last monthOver the last year Brinks, JP, and Manfra have collectively lost over 36M ounces ($720M)Figure: 8 Stock Change DetailPledged gold (a subset of Registered), has come down some after setting a new record back in July. Pledged is Registered but not available for delivery, which means gold has lost an additional 900k ounces of available delivery supply since March when you include Registered.Figure: 9 Gold Pledged HoldingsGold entered backwardation last month for three consecutive weeks until the August contract was replaced with the December contract. It has now entered the strongest contango since September 2020. In 2021, the conversion from August to December resulted in a spread increase less than $1. In 2022, that same contract conversion flipped the price almost $20!Figure: 10 Recent Monthly Stock ChangeWhile gold is back in contango, silver remains in heavy backwardation. This is the longest such period of continual weekly backwardation since 2013Figure: 11 Recent Monthly Stock ChangeHistorical PerspectiveAvailable supply for potential demandAs can be seen in the chart below, the ratio of open interest to total stock has fallen from over 8 to 1.45. In terms of Registered (available for delivery against open interest), the ratio collapsed from nose bleed levels (think Nov 2019 where 100% stood for delivery) down to 2.7 in the latest month. The recent fall in the ratio is from open interest falling faster than the physical supply. This is not unexpected though; it is much easier for the paper supply to fluctuate compared to the physical supply.Figure: 12 Open Interest/Stock RatioCoverage in silver is weaker than in gold with 13.45 open interest contracts to each available physical supply of Registered (up from 8.2 at the end of April). The ratio has been driven up by a recent increase in open interest, along with the continued movement out of Registered.Figure: 13 Open Interest/Stock RatioWrapping UpComex deliveries should not be confused with load-outs where metal actually leaves the vaults. For perspective, the August gold contract has seen 3.25M ounces of gold delivered. Ironically, this is close to the 3M ounces that have left the vault over the last month. Over time, the divergence is greater with 17.2M ounces being delivered since December and only 4.2M ounces leaving the vault during the same period.That being said, the increased delivery volume over the last 2+ years has translated to a lot more metal leaving the Comex. While Delivery volume is still close to near-term averages, the amount of gold leaving vaults has accelerated rapidly in recent weeks. With total gold inventories down almost 20% since May, this could be the early stages of a bank run, or in this case, a “vault-run”.If someone were to describe the early stages of a collapse in Comex confidence, it would look exactly like this. A few years of elevated deliveries back and forth sloshing around. Metal starts leaving the vault slowly but steadily. Inventories get thin, and the banks restock but not enough. Then a little more fear sets in and the exodus accelerates.Everyone knows there is more paper gold than physical gold, but most traders are fine with this as long as they can get the USD exposure to the gold they want through margins and futures. However, there is clearly a second set of actors in the market who are not after highly leveraged bets on short-term future gold prices. These actors understand the value of gold and silver as the true wealth and currency of the world. The data shows that these investors may be losing confidence in the system and are extracting their metal while they still can.As paper trading continues, the price of gold and silver remains suppressed in a fractional reserve system. With an infinite supply of paper shorts available, true price discovery is much harder. The real investors are taking advantage of the artificial suppression in prices, and cashing in their paper for metal.Data Source: https://www.cmegroup.com/Data Updated: Daily around 3PM EasternLast Updated: Aug 15, 2022Gold and Silver interactive charts and graphs can always be found on the Exploring Finance dashboard: https://exploringfinance.shinyapps.io/goldsilver/Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today! Continue reading →

(Bloomberg) — In December 2018, a man in his early 30s was intercepted on arrival at Fort Lauderdale airport and taken to a room where two FBI agents sat waiting.Most Read from BloombergThe target was scared and already on high alert — one of his associates had recently admitted to crimes he knew he’d also committed. Christian Trunz wasn’t a terrorist or a drug trafficker, but a mid-level trader of precious metals returning from his honeymoon. Crucially: he was also a longstanding employee of JPMorgan Chase & Co., the biggest bullion bank.The FBI’s airport ambush described by Trunz was a crucial step in the pursuit by US prosecutors of JPMorgan’s precious metals desk, leading up to last week’s climax — the conviction on 13 counts of the man who was once the most powerful figure in the gold market, the desk’s former global head Michael Nowak.Watched with a mixture of fascination and horror by precious metals traders around the world, the case has shone a light on how JPMorgan’s traders — including Nowak and the bank’s long-time lead gold trader Gregg Smith — for years allegedly manipulated markets by placing bogus orders designed to wrongfoot other market participants, principally algorithmic traders whose high-speed activity became a major source of frustration.Nowak has become one of the most senior bankers to be convicted in the US since the financial crisis, and faces the prospect of decades in prison, although it could be far less.Read: JPMorgan Gold Traders Found Guilty After Long Spoofing TrialNowak’s lawyers contend Nowak wasn’t a “criminal mastermind” and said they will “continue to vindicate his rights in court.” A lawyer for Smith said during closing arguments last month that his client’s orders were legitimate, and there are other explanations to buy and sell futures contracts at the same time on behalf of customers.It took three weeks in court for the government to persuade a jury of Nowak and Smith’s guilt. (Jeffrey Ruffo, a salesman who was tried with them, was acquitted.)But whispers of spoofing had hung over JPMorgan’s trading desk for at least a decade — many years before the FBI first approached Trunz in 2018.Alex Gerko, the head of an algorithmic trading firm, complained about Smith’s activity in the gold market as early as 2012 to CME Group Inc., which owns the futures exchanges where the US alleged thousands of spoof trades took place. But Smith and Nowak continued working at the bank until 2019, when the US unsealed charges against them.“The wheels of justice are moving, slowly,” Gerko tweeted last month.At the Justice Department, the road to JPMorgan began with a decision to begin hunting down traders who made bogus offers to buy and sell commodities that they never intended to execute. The criminal fraud unit hired data consultants to go through billions of lines of trades to spot patterns of market manipulators.As the vast quantities of data was scrutinized, there were certain traders that stood out. And they worked at JPMorgan.With the data in hand, investigators went looking for cooperators, which they found in Trunz and his former colleague John Edmonds. Both relatively junior traders pleaded guilty to their own misconduct and agreed to testify against the desk’s boss.Nowak was arrested in September 2019, sending a shock wave through the metals world, but the Covid pandemic meant it would be another three years until the trial finally took place.In his testimony, Edmonds, who’d started in an operations role at JPMorgan, described spoofing on the desk as a daily phenomenon and felt obliged to take part because it was part of the normal strategy.Read: JPMorgan Gold Desk ‘Spoofing’ Cheated Market, Ex-Trader SaysThe Justice Department’s move against JPMorgan’s most senior bullion bankers was celebrated in some corners of the gold and silver markets, where investors and bloggers have long accused the bank of a large-scale scheme to manipulate prices lower. Those allegations prompted multiple investigations by the Commodity Futures Trading Commission, the most recent of which was closed in 2013 after finding no evidence of wrongdoing.The case against Nowak and Smith made no allegations of a systematic plot to suppress prices, instead arguing that they spoofed markets over very short periods of time, and in both directions, to benefit JPMorgan’s most important hedge fund clients.And while the convictions are a victory for the prosecutors, the jury rejected the government’s most sweeping charges — brought under the Racketeer Influenced and Corrupt Organizations Act, or RICO — that the men were part of a conspiracy and that JPMorgan’s precious metals desk was a criminal enterprise.At JPMorgan, Edmonds said the practice was referred to as “clicking” rather than spoofing, and the traders never discussed it as being illegal despite the firm’s own compliance policies making it plain. Trunz even spoke of a running joke involving Smith, who would click his mouse so fast to place and cancel orders that his colleagues would urge him to put ice on his fingers.In 2012, Gerko, who is the founder of quantitative trading firm XTX Markets Ltd., complained to the CME about Smith’s trading in gold futures by rapidly entering and canceling orders. The CME began an investigation, which dragged on for three years before concluding he’d likely been spoofing.“It took a long time after 2010 to get consistent enforcement,” Gerko said in a tweet, referring to the Dodd-Frank act in which spoofing was defined and made illegal.After another JPMorgan trader, Michel Simonian, was fired in 2014 for spoofing, Nowak called his traders into his office to ask if they’d been doing the same, according to Edmonds. No one said anything. The incident shocked Edmonds, he said, as Nowak knew it had been going on for years.During the trial, Nowak appeared largely impassive, his face hidden behind a Covid mask. Industry insiders described him in 2020 as introverted and brainy, and testimony during the trial painted him as a well-liked manager, who became friendly with Trunz while the two did a stint working out of JPMorgan’s London office.During trial, Trunz was asked whether he liked Nowak, the former trader responded: “I loved him.”However, the relationship became more complicated after Trunz was approached by authorities. When he contemplated making a deal with the government, Nowak told him not to, according to Trunz, who became audibly choked up as he gave the testimony.Defense lawyers painted Trunz and Edmonds as unreliable — proven liars who were testifying against their clients in order to avoid lengthy prison sentences.Read: JPMorgan Gold Trader Says Boss Coached Him on Spoofing LieNowak and Smith won’t be sentenced until next year. For comparison, two Deutsche Bank AG traders convicted of spoofing in 2020 were each sentenced to about a year in prison.Last week’s conviction represents the pinnacle of the US Justice Department’s crackdown on the illegal trading practice known as spoofing. So far, prosecutors have managed to convict ten traders at five different banks.JPMorgan has already paid $920 million to settle spoofing allegations against it.“Even though the jury rejected the conspiracy and RICO charges, they will consider this a win,” said Matthew Mazur, an attorney at Dechert LLP who defended one of the Deutsche Bank traders. “This is probably the end of the precious metals sweep that was done, but I do think there will continue to be cases.”Even after the crackdown, some market participants say spoofing still takes place. Back when commodity futures traded in the pits, brokers had to trade face-to-face. Hiding behind a screen makes it much easier to place and pull orders at will.“We still see spoofing on a regular basis,” said Eric Zuccarelli, an independent commodities trader who began working on the floor of the New York Mercantile Exchange in 1986. “But back then if a person spoofed everybody would come over and punch you in the face and the floor committee would come over and fine you for being an asshole.”Most Read from Bloomberg Businessweek©2022 Bloomberg L.P. Continue reading →

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(Kitco News) – Despite a month-long streak of rallies for U.S. stocks, a financial crisis worse than 2008 is looming, said Peter Schiff, Chief Market Strategist at Euro Pacific Asset Management.
Schiff spoke with David Lin, Anchor and Producer at Kitco News.
Over the past month, the S&P 500 rose by 9 percent, and the NASDAQ rose by 13 percent.
Schiff warned that if the Federal Reserve keeps raising interest rates, then a worse financial crisis than 2008 will occur.
“2008 was about bad debt,” he explained. “It was about people borrowing money and they couldn’t pay it back. The collateral for those loans was no good because it was real estate, and prices went down. Well, we have much more debt now than we had in 2008… and so this is going to be a much bigger crisis when the defaults start.”
Schiff added that this time, banks would not be able to be bailed out.
“When they fail, it’s going to be a lot worse, except with inflation too high and the Fed fighting inflation,” he said. “There’s no TARP 2.0. All these banks are going to have to be allowed to fail.”
Inflation to get worse
The latest Consumer Price Index (CPI) figures were released on Wednesday morning.
Year-on-headline CPI, which includes food and energy rose by 8.5 percent in July, a reduction in the official inflation figure compared to the previous month, when year-on-year prices rose by 9.1 percent. The 9.1 percent figure was a 41-year high.
On the same day as the CPI release, President Joe Biden claimed that there had been a “zero percent” change in month-on-month consumer prices.
“Today, we received news that our economy had zero percent inflation in the month of July,” said Biden. “When you couple that with last week’s booming jobs report of 528,000 jobs created last month and 3.5 percent unemployment, it underscores the kind of economy we’ve been building.”
President Biden was referencing the month-over-month change in headline CPI, which was unchanged from the previous month of June.
Core CPI, which excludes food and energy, grew by 5.9% year-on-year, and increased 0.3% month-over-month.
“If you believe the official CPI, then prices, that are already very high, did not get any higher during the month of July,” Schiff explained. “I don’t think that’s something to celebrate… It’s not like consumers actually got the relief of prices coming down.”
Despite the slight fall in reported CPI, Schiff said that inflation will get a lot worse.
“There’s no doubt in my mind that we will get a higher number than 9.1 percent [inflation],” he said. “We are nowhere near done with this inflation problem. It is going to be here for years and years, and probably the remainder of this decade and then some.”

A dollar implosion?
As the Fed pivots to prevent a “massive financial crisis,” Schiff said that this would result in a “sovereign debt crisis” and a “U.S. dollar crisis.”
The U.S. dollar index is up by 9.5 percent year-to-date. However, Schiff claimed that future events are not properly priced into this.
“The dollar has risen so far, in the early stages of this big inflation, because investors are delusional about the Fed’s ability to contain inflation and bring it back down to 2 percent,” he said. “When they wake up to reality, that inflation is going to be way above 2 percent indefinitely, then the dollar is going to fall through the floor, and then gold and silver will go through the roof.”
To find out Schiff’s thought on the next financial crisis, as well as his views on the Inflation Reduction Act, watch the above video.
Follow David Lin on Twitter: @davidlin_TV
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(Bloomberg) — The former head of the JPMorgan Chase & Co. precious-metals business and his top gold trader were convicted in Chicago on charges they manipulated markets for years, handing the US government a win in its long crackdown on bogus “spoofing” orders.Most Read from BloombergMichael Nowak and Gregg Smith were found guilty Wednesday by a federal jury after a three-week trial and more than eight days of deliberations. Prosecutors presented evidence that included detailed trading records, chat logs and testimony by former co-workers who “pulled back the curtain” on how Nowak and Smith moved precious-metals prices up and down for profit from 2008 to 2016.A third defendant, Jeffrey Ruffo, who was a salesman on the bank’s precious-metals desk, was acquitted of charges he participated in the conspiracy.The case was the biggest yet in a crackdown by the US Justice Department. Nowak, the managing director in charge of the desk, and Smith, its top trader, were convicted of fraud, spoofing, market manipulation. The government alleged the precious-metals business at JPMorgan was run as a criminal enterprise, though the jury acquitted all three men of a separate racketeering charge.“They had the power to move the market, the power to manipulate the worldwide price of gold,” prosecutor Avi Perry said during closing arguments.US District Court Judge Edmond Chang said Nowak and Smith will be sentenced next year. Each faces decades in prison, though it may be far less. Two Deutsche Bank AG traders convicted of spoofing in 2020 were each sentenced to a year in prison.Read More: JPMorgan Trader Spoofed So Fast Colleagues Urged Ice on Fingers“While we are gratified that the jury acquitted Mr. Nowak of racketeering and conspiracy, we are extremely disappointed by the jury’s verdict on the whole, and will continue to seek to vindicate his rights in court,” his lawyer, David Meister, said in an email.An attorney for Smith didn’t respond to messages seeking comment.Ruffo’s lawyer, Guy Petrillo, said in an email, “Mr. Ruffo, his family and we always believed in Jeff’s innocence and are grateful that these unfortunate charges are now behind him.”JPMorgan, the largest US bank, agreed in 2020 to pay $920 million to settle Justice Department spoofing allegations against it, by far the biggest fine by any financial institution accused of market manipulation since the financial crisis.With Wednesday’s verdict, the Justice Department has secured convictions of 10 former traders at Wall Street financial institutions, including JPMorgan, Merrill Lynch & Co., Deutsche Bank AG, The Bank of Nova Scotia, and Morgan Stanley, Assistant Attorney General Kenneth A. Polite Jr. said in a statement.“Today’s conviction demonstrates that no matter how complex or long-running a scheme is, the FBI is committed to bringing those involved in crimes like this to justice,” Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division said in a statement.The criminal case against some of the biggest players in the precious-metals markets was closely watched. Spoofing became illegal with the passage of the Dodd-Frank Act in 2010.“It’s something that’s been on the minds of many people that were involved in the precious-metals markets in that point in time, and I would say this verdict closes a chapter,” said Phil Streible, the chief market strategist at Blue Line Futures. “This kind of thing had been going on for at least 15 years or more with people waiting for justice, and I never thought it would ever get closed.”Read More: From Profits to Pay, JPMorgan’s Gold Secrets Spill Out in CourtDennis Kelleher, co-founder and Chief executive officer at Better Markets, an organization advocating stricter financial regulation, said the verdict “should signal to Wall Street’s biggest financial firms and executives that they are not above the law.”The star witnesses at the criminal trial were former co-workers who said they participated in the spoofing activity over years. Traders John Edmonds and Christian Trunz testified about market manipulation by all three defendants at JPMorgan, while trader Corey Flaum described similar behavior when he worked with Smith and Ruffo at Bear Stearns, before it was acquired by JPMorgan in 2008.The JPMorgan case wasn’t a complete victory for prosecutors.All three defendants were acquitted of violating the Racketeer Influenced and Corrupt Organizations Act, a law more commonly used against gangs or mafias. Jurors didn’t agree with claims by prosecutors that the JPMorgan precious-metals desk was run as a criminal enterprise. No witnesses or chat logs presented during the trial showed the defendants openly discussing their intent to spoof.Racketeering charges also are part of the federal government’s case against Bill Hwang, whose Archegos Capital Management collapsed last year and cost banks billions.Read More: JPMorgan Gold Trader Says Boss Coached Him on Spoofing LieThe case is US v. Smith et al, 19-cr-00669, US District Court, Northern District of Illinois (Chicago)(Updates with comment from DOJ)Most Read from Bloomberg Businessweek©2022 Bloomberg L.P. Continue reading →

Darren415/iStock via Getty Images By Blu Putnam At A Glance The labor market continues to grow despite two quarters of negative real GDP Slow labor force growth plus low labor force participation rates are both working to keep the job market tight There is a disconnect between U.S. real GDP and the labor market. The U.S. job market remains quite healthy, with the unemployment rate under 4%, and job growth, while slowing, remains above the likely long-run trend. By contrast, U.S. real GDP was negative for Q1 2022, and according to the Atlanta Fed’s GDPNow estimate may be negative in Q2 as well. There are four key factors to watch in this disconnect. Some may choose to call two back-to-back quarters of real GDP declines a recession. But the National Bureau of Economic Research’s recession dating committee will probably disagree since they focus more on real personal income and nonfarm payroll employment, the latter of which remains very strong. Author 2. The Fed’s jobs mandate is specifically to encourage full employment. So, the jobs data takes priority over GDP data in the calculus of how fast interest rates might be raised to combat elevated inflation. Author 3. Real GDP recovered its pre-pandemic peak back in Q2 2021, so it was naturally going to decelerate after such a rapid rebound. For jobs, the pre-pandemic peak is only now being fully recovered, with job vacancies abound and wages rising. 4. Labor force growth is likely to be very slow, and labor force participation rates are low, both working to keep the job market tight. Author The bottom line is that a robust labor market is not necessarily going away just because of a little GDP weakness after a very rapid rebound. Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors. Continue reading →