US economy added a whopping 254,000 jobs last month

Good news for Kamala Harris and the Democratic Party.

President Joe Biden touted the better-than-expected jobs data in a post on X Friday morning.

“Great news for American workers and families: Today, we learned our economy gained over 250,000 new jobs in September and unemployment is back down at 4.1%. With today’s report, we’ve created 16 million jobs, unemployment remains low, and wages are growing faster than prices.”

Fed Chair Powell: “There’s really nothing that I can point to in the economy that suggests that a downturn is more likely than it is at any time.”

The September jobs report also showed an uptick in wage growth, with average hourly earnings growing by 0.4% for the month. That brings the annual rate up to 4% from 3.9% seen in August, according to Friday’s report.

Myth Busting

America is NOT in a recession. Unemployment is at a 50-year low and the Stock Market is at an all-time high!!!

‘2023 Was A Miraculous Year’

Nobel laureate Paul Krugman on Friday took exception to comments made by Republican presidential primary candidate Nikki Haley.

Haley offered a bleak take on the economy in a campaign speech in her home state of South Carolina on Wednesday. Criticizing her GOP rival Donald Trump for throwing a temper tantrum, Haley said, “He [Trump] didn’t talk about the American people once he talked about revenge. He didn’t talk about the fact that we’ve got an economy in shambles and an inflation that’s run out of control.”

Sharing excerpts of Haley’s comments from OK Magazine on X, Krugman said the economy grew 3% and core inflation was back at 2%. Haley repeated those claims on her Meet the Press interview on the Sunday January 28 program.

Krugman also said the six-month annualized rate of the core price consumption expenditure index should be considered as a more accurate inflation measure than the core annual inflation rate.

“Using annual core CPI puts you way behind the curve, for 2 reasons. First, annual: even core CPI was 4.6 in the first half of 2023, 3.2 in the second half. Second, known lags in official shelter prices lagging far behind market rents,” he said.

“So annual CPI creates a spurious impression of stubborn inflation, with a difficult last mile to cover.”

He observed that shelter receives a lower weight in the calculation of price consumption expenditure.

“The inflation battle is over. Now we need to worry that lagged effects of rate hikes will tip us into an unnecessary recession,” the economist said.

U.S. Economy is Doing Great!

America’s employers added a stunning 517,000 jobs in January, a surprisingly strong gain in the face of the Federal Reserve’s higher interest rates. Given that employers added less than 300,000 new jobs in each of the past three months and the Federal Reserve has increased borrowing costs for the past year the January jobs report is astonishing.

After reaching a horrifying rate of 8.5% in March of 2022, the inflation rate was down to 6,5% this past December.

So with jobs plentiful, employers offering higher pay, and inflation declining is this economy in trouble?

The answer is an emphatic NO.

Foreign Buyers are Distorting America’s Housing Market

If you are not a resident of Canada but want to buy a piece of real estate in British Columbia or Ontario you must pay a tax of 20% of the purchase price. The tax was implemented to discourage foreign buyers who have driven up demand.

That is not the situation in the United States but that kind of tax should be implanted. Los Angeles area Southern Regional Association of Realtors, Inc. published an article in the Los Angeles Times Advertising Supplement on Saturday August 6, 2022 reporting that sales to foreign buyers is up 8.5%. International buyers purchased $59 billion worth of U.S. residential properties from April 2021 to March 2022.

In the Los Angeles area San Gabriel Valley is a well known area where Chinese buyers have bought homes where they do not reside.

Forbes magazine reports July 19, 2022. Anyone who bought a home – or tried to – over the past couple of years knows that it was rip-roaringly competitive, with bidding wars and all-cash deals. But it actually could have been worse. One group all but disappeared from the market during the pandemic: foreign buyers with mega millions. But now foreign real estate investments are slowly coming back, according to a new survey from the National Association of Realtors.

Ensuring affordable housing for all Americans is not on the agenda in Congress but it should be.

This is the Wrong Year to Buy a Car

Consumer Reports is now saying that unless you need a new car now is not the time to make a buy. Some models are so hard to come by that consumers are paying well above the sticker price for them. Many do not even have a good rating by CR.

Many of my local dealers have very limited selection of popular brands like Honda and Toyota. Some dealers have no cars of some models. This situation has driven up the price of used cars.

Here is a list of cars being sold at substantial prices over MSRP window stickers according to Consumer Reports.

Kia Rio: 21% Over MSRP

Hyundai Accent: 19% Over MSRP

Chevrolet Spark: 19% Over MSRP

Kia Telluride: 19% Over MSRP

Chevrolet Camaro: 18% Over MSRP

Subaru Crosstrek: 18% Over MSRP

Kia Seltos: 18% Over MSRP

Kia Sorento: 18% Over MSRP

Hyundai Tucson: 18% Over MSRP

Kia Carnival: 17% Over MSRP

Average New-Car Price Tops $47,000, an All-Time High

Consumer Reports now reports that for the first time ever, the average price of a new car has edged past $47,000, according to a new report from Kelley Blue Book and data from TrueCar. Blame it all on the pandemic and the resulting global semiconductor shortage that has hobbled automakers’ ability to crank out new cars, crimping supply, pushing up prices, and limiting availability.

Over several years, a variety of factors has contributed to pushing up the average new-car price. For one thing, consumer tastes have gravitated toward more expensive truck and SUV models. And the recent scarcity of all models has led to more extreme price increases among traditionally more affordable models. The preference for safety features that are on the high end trim lines has also been a factor. Those safety features require computer chips that are in short supply.

Over two years ago I bought a year old car that had all of those safety features. That was before COVID effected car manufacturing and the new car dealer had a parking lot of used cars to choose from. Not anymore.

Business Insider says the best bet for most consumers is to delay buying a car. As the dealers obtain higher stocks prices will fall.

We Will Buy Your Car

This is a great time to sell your old unwanted car. These are the words posted on the internet ad by my local Toyota dealer. “We will buy your car even if you don’t buy from us.” Carvana is running a similar ad on their cable television ads. What’s going on? Why do they want my old car?

It’s simple. Car dealers lack inventory. After going to the Los Angeles Auto Show and sitting in their new cars I looked at my local dealer web sites to see what models they had in stock. Some had none. Some had a handful of 2021 cars and the trim choice was one. Take it or leave it. 2022 cars are even rarer. To keep their business alive those new car dealers want your old car so they will have any inventory to sell.

What’s going on here? It’s a year of shortages. The auto industry’s turmoil may be unrivaled. It’s all about the computer chips in short supply. Every car needs them and so do appliances. The chip makers are overwhelmed by the unexpected demand. Most of the chips are made overseas in China and Taiwan. Most the cargo ships are waiting to be unloaded in the ports of Long Beach and Los Angeles. Those computer chips are somewhere among the cargo containers on the ships.

2022 will be an expensive year to buy a car. This is definitely a supply demand situation. Some car dealers are actually asking for more than the sticker price. Unless you really need another car it has been advised by many to wait until 2023.

Auto Shows are Fun to Visit

I visited the Los Angeles Auto show the other day. It’s always fun to see what is new. The big push was on all electric vehicles that are referred to as EVs.

The most significant thing for me was the number of companies offering cars that I never new existed. Lucid Motors, Fisker, Bremach, Cobera, EdisonFuture, Electra Meccanica, Imperium Motor Co., Mullen, Sondors, VinFast. Is there any chance that any of these companies will survive? Fisker has a very large display as you enter the South Hall of the Los Angeles Convention Center. Henrick Fisker claims to have raised $1.6 billion in a public offering last year, he said, and there were 19,000 reservation holders waiting for his cars. His display includes his first offering called Ocean, an EV SUV.

These vehicles are great in a city where there are charging stations but there is a big downside to having an EV if you plan to travel. First there is finding a charging station. Second is the time to charge the cars. “Coming to Yosemite with your Tesla or other electric vehicle? Stop in at Tenaya Lodge for a charge! … Things you can do while you charge your car: Dine in one of our five restaurants.” That is on Highway 41 outside the park.

There are two charging stations in Yosemite Valley. Today the one by the Ahwahnee Hotel is closed. Using I5 going from Los Angeles to Oregon you will need a map to locate charging station locations and a lot of patience.

Despite these two glaring issues Nissan is introducing a new EV SUV that is beautifully designed. In my view the vehicle was the outstanding car.

But there is a problem. A shortage of computer chips has slowed the manufacturing of all vehicles.

So while going to the auto show is fun. Dealers have little or no 2021 and 2022 cars in stock.