Shrinking Workforce Undermines Wage Power Amid Inflation
Wolf Street: "The labor force has been dropping since last fall amid the crackdown on illegal immigration, a tightening up of some work-visa programs, and the wave of boomer retirements. In April, it dropped by another 92,000, to 169.99 million. Over the past six months, it has dropped by 1.45 million...From a long-term perspective, this is a tight labor market, but not because there is sharply growing demand for labor – there isn’t – but because of the declining supply of labor...Workers have curtailed their demand for higher wages. But now inflation is accelerating sharply and has about reached this rate of wage growth, putting wage growth at risk of falling below the rate of inflation." For all the talk of AI's long-term job destruction potential, too little attention is paid to the implications of labor negotiating power being degraded in the shorter term. By and large, corporate leaders have been disingenuous in crediting AI as the reason for layoffs. It's a way to claim AI leadership while avoiding taking responsibility for management missteps, whether over hiring or subpar performance. However, it's hard to look at the two charts below and not think AI-driven insecurity is already a contributor to earnings growth falling while labor scarcity rises. This is a particular concern at a time when US consumer health is deteriorating and inflation is accelerating. More to come on this in my next report on "The Private Credit Reckoning". Learn about Sage Road Research here: https://t.co/Wgwz2xnvR6. Interested in subscribing? Message me. Wolf Street link: https://t.co/p43UOFgr6G
Dollar Dominance Trades US Gains for Chinese Factory Control
The charts rhyme b/c of "dollar dominance": China exports a lot of cars (& other things) US exports a lot of stocks & bonds (but not much else on net) The ultimate outcome = China gets US factories & controlling stakes in US...
Germany's Industrial Output Contracts Again, Undermining Rearmament
For the second consecutive month, Germany’s industrial production SHRANK. Warmonger Merz’s rearmament plans aren’t working. GERMANY = IN THE TANK. https://t.co/i6QfH6Ef4w
Inflation Surges Past 3.5%, Yet Still Labeled Transitory
Inflation is about to print >3.5% and soon >4.0% as commodity prices are still rising with no end in sight. But don't worry, it's just transitory. https://t.co/ASP1TKtbsj
Korea Posts $300B Surplus Amid Record Won Weakness
Two things I never thought I would see: a $300b Korean current account surplus, and a $300b surplus paired with near record won weakness against the US dollar Strange times https://t.co/iSymq2hcGb
China's EV Exports Outpace Gasoline for First Time
China shipped more electric than gasoline cars worldwide for the first time ever in April 52.7% of 769,000 cars exported were EVs, doubling EV exports from last April. More EVs because they save consumers $20,000-$40,000 in fuel costs if driving 15 y/15,000...
OVX Double VIX Highlights Oil’s War‑Driven Fragility
OVX remains roughly 2x VIX during the Iran war Oil markets are pricing persistent physical disruption and systemic fragility. Equity markets are pricing containment, liquidity, and normalization. #OilMarkets #OVX #VIX #IranWar #Energy #Geopolitics #Macro #SystemicRisk https://t.co/P1HxZdHFGn
Central Banking Losing Relevance Amid Three Mega‑Trends
CENTRAL BANKING IN THE AGE OF THREE BIG MEGA-TRENDS: In today's newsletter, I wrote about our conversation with @economistmeg and why central banking (I think) feels less central to the big economic challenges that every country on earth seems to be...
AI Growth Offsets Shock, Markets Remain Consistent
“No market disconnect … A common narrative is that markets are disconnected as equities and credit hold firm while oil, commodities and yields rise. We see no inconsistency. The AI buildout is offsetting the shock’s drag on growth, while energy...
Saudi MAP Shipment Departs; Eight Phosphate Ships Await
Incase you are wondering how the global fertilizer crisis is shaping up - the 2nd Saudi cargo of MAP just left the Persian Gulf for Brazil since the end of Feb. There are 8 ships loaded w/phosphates waiting. https://t.co/MjbR9M1Cx7
Trump Opens Beef Imports to Curb Soaring Prices
Imports (and tariff cuts) to the rescue, AGAIN: "Trump Clears Way for More Beef Imports, Aiming to Bring Down Record-High Prices" https://t.co/PrVADPxrF7 https://t.co/WqLArEHL6p
Four Unconventional Policies May Counter Rising Economic Tension
Price controls Nationalization Financial repression Fiscal-monetary coordination @GitaGopinath warns that all four of these policies might form a heterodox response to our current situation of high economic tension. https://t.co/4BUheOAiko
World Indifferent to Hormuz Closure, Shipping Adapts Anyway
Nothing would be better for my maritime media business than pumping doom and gloom: the world is over if the Strait of Hormuz doesn’t reopen. The mainstream press is happy to write that story. I’m not. Yes, the situation is bad. But...
Banks Overstated Tariff Risks; Rollbacks Reveal Bias
Everyone and their mother at investment banks screamed about how tariffs would increase inflation and decrease growth last year, while literally no one seems to care about the impact now that they’re basically being rolled back. I don’t think I’ve...
Goldman Sachs Lifts 2026 Nickel Forecast on Supply Squeeze
May 11 (Reuters) - Goldman Sachs raised its 2026 average nickel price forecast to $18,500 per metric ton from $17,200 on Monday, citing tighter Indonesian supply due to reduced ore quota allocations and sulfur shortages.
Private-Sector Spending Reshapes Economy Beyond Past Stimulus
3/ This private-sector spend is tectonic. Instead of financial engineering, we’re seeing a fundamental re-tooling of the economy. The scale of this investment dwarfs traditional "stimulus" and creates a floor for this cycle that didn't exist in '98. https://t.co/MLigMBxeIO
Trump's Iran War Tactics Undermine US Gulf and European Alliances
With his conduct of the Iran war, Trump is lighting on fire US alliances in the Persian Gulf and Europe. Speaking on MS NOW. https://t.co/xrxgf5Rrgs
China’s Free‑Trade Push Beats US Protectionism
My take in @FortuneMagazine on China’s FREE TRADE INITIATIVES: “China has eliminated tariffs on African partners, fast-tracking Chinese investment in India, and exporting open-source AI through DeepSeek. While Washington builds walls, Beijing opens doors." https://t.co/ylMhrtrfhr
Europe’s US Exports Shrinking at Pandemic‑crisis Pace
Europe's exports to the US are contracting at a similar rate to what we saw during the 2020 pandemic and the 2008 financial crisis. Via StanChart: https://t.co/glkSUbAlPG
College Tuition Outpaces Inflation by Threefold
College tuition is up 672% over the last 40 years. Overall inflation? +198%. This isn’t normal. This isn’t sustainable. This isn’t a good thing. https://t.co/PGwigPNTS1
U.S. Dominates Global Debt System, No Exceptions
The US controls the global debt & finance system No one gets a pass on that @Lucaswb8928 Not China, not other BRICS NADIE https://t.co/QCGQBxGGCF
IMF Model Shows Yuan Undervalued About 25‑30%
With a realistic current account surplus number (one that takes out the 22 downward adjustment in the goods surplus and uses a realistic estimate of the income balance), the IMF's model would suggest a 25-30% undervaluation
Tariff Revenues Plunge 30% as Imports Rise 7%
Tariff revenues are down over 30% since October despite import volumes rising 7%. The Trump-Xi meetings carry much lower stakes this year than last. Read this week's Scouting the Tape below for more. https://t.co/E2nzNSJ6uM
Hormuz Sovereignty Never a Pre‑war Issue, Now Contested
It cannot be stressed hard enough that Hormuz sovereignty was never a sticking point prior to the war. This is the reality that was shattered, and we aren't going back. Iran threatened the Strait plenty, but it was always largely bluster and...
Unseen Union Breakup Mirrors Brexit, Unconscious US Split
The more I think about it the more this resembles a Brexit type situation. Except, it's a defection from a union that most people weren't even aware they were in. A kind of unconscious uncoupling from America. https://t.co/eqPaPPinTW
Trump Proposes US‑China Trade Board Ahead of Summit
The Trump administration has proposed a US-China "Board of Trade" as a deliverable for the Beijing summit between the two presidents this week. Details thus far are scant. If I were a journalist on the trip, these are the first questions...
US Leverages Free Digital Services for Global Influence
The below, from the FT, is an interesting framing. But I would add another element to it. Given that most of these services are free at the point of use, it's not just that we are dependent on US services. Rebuilding...
Fed Signals Cuts, Market Expects 2027 Hike—New Chair Faces Mismatch
The blue line is what the Fed is communicating. 2 rate cuts this year. The orange line is what the market is pricing in, a rate HIKE by Summer 2027. Warsh starts as Fed Chairman on Friday. High on his agenda...
Equity Risk Premiums Hit Pre‑GFC Lows; Bonds Gain Appeal
APAC ex Japan's equity risk premium sinks to the lowest since right before the GFC $VPL $EEM Same with Europe $VGK ... bonds increasingly attractive vs stocks https://t.co/9RoQNv3ref
Oil Shifts From Inflation Gauge to Geopolitical Fragility Signal
Higher oil prices used to signal market tightness Now they signal system disorder Oil is evolving from an inflation-growth indicator to a geopolitical fragility indicator #OilMarkets #WTI #OVX #Volatility #Energy #Geopolitics #IranWar #UkraineWar #Commodities #Macro #SystemicRisk #TrumpTariffs
USDA Confirms 380k Tons to Mexico, 128k to South Korea
USDA confirms the following U.S. corn export sales: ▪️380,000 metric tons to Mexico (220kt in 2025/26 and 160kt in 2026/27) ▪️128,000 tons to South Korea in 2025/26
China’s New Swagger in EU Trade War Explained
Thanks to the AMAZING @fbermingham for explaining how China got that swagger to fight its trade war with the European Union, and what Brussels is doing about it. https://t.co/mkXPVVokbU
Yield vs Oil: Diverging Trends on 3-Day Tick Chart
3-day tick chart ... * White (right scale), U.S. 10-year yield * Blue (left scale), June WTI Crude Oil Futures What is the difference? https://t.co/nwUGdEL9j4
China Drives Platinum Surge, Prompting South African Production Boost
China is pulling platinum into the country hard. A major Chinese refiner reports surging physical delivery demand on the new Guangzhou Futures Exchange platinum contract. Speculators and industrial users are opting for delivery rather than closing shorts, capturing the premium over...
Trump's Blunder Reveals US Can't Secure Oil, Boosts Iran
I've said for a long time that the cost and risk of using fossil fuels would eventually start driving importing nations to renewable energy and EVs. What I didn't count on was Trump proving decisively that US "world's policeman" military...
US Rejects Iran Counter‑Proposal, Dollar Holds Firm
Monday Blues: US Negotiating Tactic or Ceasefire may End: News that the US rejected Iran’s counter-proposal is set the tone for today’s session. The dollar is mostly firmer, though the Canadian dollar and Norwegian krone are slightly firmer. Equities are…...
Trump's Beijing Visit Marks First US Presidential Trip in Decade
JUST IN: President Trump to arrive in Beijing on Wednesday, the first time a US President will visit China in nearly a decade
Mexico Delivers Final 15th Rate Cut to 6.50%
Global Central Bank Update: -Mexico cut rates for the 15th time in the cycle with a 25 bps move down to 6.50%. The board stated this will be the final cut in the easing cycle. https://t.co/l5IYmkeySJ https://t.co/669sf1Lo6O
Key Trends and Trades Amid Financial Repression Unveiled
The top trends and trades in the wild world of financial repression. Special thanks to @tomkeene and Bloomberg Surveillance - we’ll be on soon. https://t.co/MX5hi33aji
China Sees a Violent, Declining U.S. Hegemony
35-year CIA veteran: “The Chinese have a very dark portrait of the United States as a global hegemon that’s declining in power and becoming more violent as it tries to cling to its primacy.” https://t.co/k0BBoVA8G8
U.S. Oil Export Boom Turns Dollar Oily
The Dollar used to have a negative correlation with oil prices, but that was when the US was a net importer. About 5 years ago, the US transformed into a net exporter and so now higher oil prices lift the...
US Ramps up Exports as China Curtails Imports
"the United States has responded by cranking up exports, while China has slashed imports" https://t.co/09kxu4zCqF https://t.co/jQMwClxNcB
Payroll Gains Mask Underlying Job Losses and Wage Decline
It’s tiring having to listen to talk on bubble vision about how great the U.S. economy is, as has been the case this morning. Good grief. Everyone is fixated on the +115k nonfarm payroll gain in April, with nary a comment anywhere...
Inflation Data This Week Crucial, Says
A clip from this morning's conversation on CNBC with Andrew Ross Sorkin, Becky Quick, and Joe Kernen. Thank you for having me on Squawk Box. https://www.cnbc.com/video/2026/05/11/the-inflation-numbers-are-going-to-be-absolutely-critical-this-week-says-mohamed-el-erian.html #economy #markets
CPI Drops Tomorrow, PPI Follows—If You Trust the Numbers
The consumer price index (CPI)* report will be released tomorrow, and the producer price index (PPI) report will be released on Wednesday. *for those that trust the data
Elasticity Holds Crude, Corn Prices; Copper Vulnerable to Market Swings
Crude, Corn, Copper vs. Primary Forces of Elasticity, Dependency Elasticity is a top force that has kept the primary energy and agriculture commodities -- crude oil and corn -- under price pressure for decades, and 2026 is a good test. Ample...
US‑Germany Ties Strain as Trump Mulls Troop Pullout
Relations between the US & Germany are quickly deteriorating. Chancellor Merz criticized the US for lacking a coherent negotiation strategy. President Trump responded by floating the idea of reducing US troop deployments in Germany. Full Newsletter: https://t.co/GsJKw5kfCF https://t.co/IVEtk17ZhT
Voters Overwhelmingly Back CGT and Negative Gearing Reforms
Did you explain to the respondents first that capital is mobile? That Australia already has a productivity problem and that increasing capital gains tax likely makes it worse?
US‑China Talks Target Chinese Purchases of Key U.S. Exports
"Discussions will focus largely on trade issues, namely the Chinese purchases of American agricultural goods, energy products and aerospace technologies such as Boeing airplanes, a senior U.S. official said. The leaders will also discuss establishing a U.S.-China board of trade...
China's Auto Exports Surge While Domestic Demand Falters
China's auto sector is a near-perfect metaphor for China's economy -- domestic demand is down, quite significantly. But exports are on a rocket ship up -- vehicle exports should come close to reaching 12m this year, car...