That’s up from 322,000 in May. Jobs are a lagging indicator and tend to peak well after the economy has peaked. But they are the best coincident indicator of economic activity.
Warren Buffet recently said that he has not yet seen any green shoots in the economy. Conversely, General Electric Co. (NYSE: GE) Chief Executive Officer Jeffery Immelt said that all the pieces are in place for a recovery in the United States. Yet the only areas of strength he mentioned were abroad: China, some areas of the Middle East and other emerging economies.
But what we can all agree on right now is that there is no inflation in sight, despite the massive amounts of quantitative easing from the U.S. Federal Reserve. But it won’t be long before inflation does rear its ugly head.
Like the people in Germany who were deeply affected by hyperinflation, I remember living and analyzing companies in Argentina in the 80s with inflation rising at a rate of 1% a day. It was not fun, and the distortions to economic activity and financial statements were amazing.
Although the Fed has repeatedly indicated that it is ready to remove the monetary stimuli at the appropriate moment in an aggressive-enough fashion so as to preclude an inflationary spike, neither we can be sure that the central bank’s actions will meet with immediate success.
Federal Reserve Chairman Ben S.
