SHADOWSTATS DAILY UPDATE – March 17th to 18th [Posted Mar 17, 2:45 p.m. ET]. Pending ShadowStats Commentary No. 1461 is planned for publication over the weekend, likely Monday the 21st. In the headline ECONOMIC, INFLATION, FEDERAL RESERVE and POLITICAL Sections, a “FLASH” designation marks the most recent or important stories, with detail behind the headlines reviewed in the ensuing LATEST NUMBERS Section, and the latest FOMC developments and Monetary circumstances discussed in the subsequent SYSTEMIC RISK Section – MONEY SUPPLY and MONETARY BASE. Keep scrolling down for SHADOWSTATS BACKGROUND, BUSINESS CYCLE, SHADOWSTATS ALERT, PLANNED POSTINGS and other Sections.

O P E N I N G .. H E A D LI N E S – A sampling of the most-recent FEDERAL RESERVE (Monetary), INFLATION, ECONOMIC and POLITICAL Headlines:

• SHADOWSTATS GENERAL ASSESSMENT: Monetary, Inflation, Economic and Political circumstances all continue to show intensifying systemic instabilities and meaningful deterioration.

• E C O N O M Y – FLASH (Mar 17): February 2022 Industrial Production gained 0.5% in the month, largely in manufacturing, as expected, but that was an aggregate increase of 0.1% net of downside revisions to January 2022 activity, December 2021 activity also revised lower; Capacity Utilization increased by 0.3%, in the month, unchanged, net of prior revisions, while downside revisions were seen across the board with the Manufacturing, Mining and Utilities Sectors.

• (Mar 17): Headline February 2022 Housing Starts jumped 6.8% on top of upside revisions, although not statistically meaningful at the 90 confidence interval, while fully counted Building Permits declined by 1.9% (-1.9%) on top of a minimal downside revision to January activity.

• FLASH (Mar 16): February 2022 Real Retail Sales declined by 0.5% (-0.5%) month-to-month, against an upwardly revised 4.2% [previously 3.1%] gain in January, following the weakest Holiday Shopping Season (November and December 2021) since the depths of the Great Recession; seasonally and inflation-adjusted January 2022 Real Retail Sales remained shy by 1.8% (-1.8%) of recovering its April 2021 Pandemic peak level.

• FLASH (Mar 14): Not seasonally adjusted, the February 2022 CASS® FREIGHT INDEX rebounded month-to-month by 8.6%, following an Omicron-attributed January plunge of 10.8% (-10.8%), and it gained 3.6% year-to-year, having dropped by 2.9% (-2.9%) in January; the seasonally adjusted INDEX gained 3.6% month-to-month in February, having declined by 7.4% (-7.4%) in January.

• FLASH (Mar 11): The University of Michigan’s preliminary estimate of its March 2022 Index of Consumer Sentiment showed continuing plunge, at new ten-year and Pandemic lows (go to http://www.sca.isr.umich.edu for details).

• FLASH (Mar 8): The Real U.S. Merchandise Trade Deficit continued to explode in January 2022, setting a new record monthly shortfall, overtaking the prior record monthly deficit of December 2021 (which deepened in revision) and following the deepest ever annual (2021) and quarterly (4q2021) Deficits.

• FLASH (Mar 4): A sharp jump in people working “Part time for economic reasons” accounted for 76% of the gain in the February 2022 “Employed” count, with the resulting headline February U.3 Unemployment Rate declining by 0.2% (-0.2%) to 3.8%. Yet, the broader U.6 and ShadowStats Unemployment Rates both increased by 0.1%, respectively to 7.8% and 24.6%, reflecting the deteriorating economic conditions.

• Still well shy of Economic Recovery, February 2022 Payroll Employment jumped by 678,000 in the month, on top of upside revisions to December and January activity, but it still was short by 2.1 million jobs or 1.4% (-1.4%) of recovering its Pre-Recession/ Pre-Pandemic Peak.

February 2022 Payroll Employment also held shy by about 4.4% (-4.4%), or 6.9 million jobs, of where it would be had the U.S. economy been able to continue its relatively stable economic trends in place before the Pandemic shutdown.

How can the U.S. Economy be “Recovered” as suggested by the headline GDP and touted by the Fed, with February 2022 Payroll Employment still 1.4% (-1.4%) shy of recovering its Pre-Recession/ Pre-Pandemic Peak activity? Although well off the Pandemic bottom and improving, the current Pandemic-driven shortfall in Payroll recovery remains deeper than at the trough of the 1980 Recession. [See the later BUSINESS CYCLE Section and extended discussion and graphs in pending No. 1461.]

• FLASH (Mar 1): On top of the usual prior-period upside revisions, and adjusted for surging construction inflation, January 2022 Real Construction Spending continued in deepening monthly, quarterly and annual contraction.

• FLASH (Feb 25): January 2022 New Orders for Durable Goods gained 1.6% in the month, amidst surging inflation and explosive growth in, and upside revisions to, Non-Defense Aircraft orders; Real New Orders declined by 1.2% (-1.2%) net of inflation and the volatile commercial aircraft sector.

• FLASH (Feb 24): The minimally revised second estimate of Fourth-Quarter 2021 Real Gross Domestic Product (GDP) growth confirmed anew that the bulk of recent economic gain and “Recovery,” in Second-Half 2021 GDP, reflected no more than an ongoing, accelerating pace of buildup in unsold Inventories, resulting from extraordinarily weak demand [see the later Retail Sales paragraph].

• Where the headline Fourth-Quarter 2021 annualized Real GDP growth revised to 6.99% [previously 6.89%], Final Sales (GDP net of the Inventory change [buildup]) was just 2.02% [previously 1.88%]; following an unrevised and what had been weaker-than-expected Third-Quarter 2021 annualized Real GDP Growth of 2.30%, with Final Sales of just 0.08%, again, net of the buildup of unsold Inventories in that quarter.

• Where the latest headline Fourth-Quarter GDP has recovered its Pre-Pandemic Peak activity by 3.17%, the ShadowStats-Corrected GDP, deflated by more-realistic Inflation, still held shy of doing so by 0.96% (-0.96%).

• (Feb 24/18): Headline January 2022 New Home Sales declined by 4.5% (-4.5%) in the month, which, as usual, was not a statistically significant change; Existing-Home Sales, however, gained a statistically meaningful 6.7% in the month.

• I N F L A T I O N - FLASH (Mar 15): On top of upside revisions, the February 2022 Producer Price Index Finished Goods jumped 2.4% in the month, up by 14.4% year-to-year, from a revised 13.4% [previously 13.1%] in January.

• Including the nonsensical Services Sector inflation, which turns negative with rising gasoline prices, the aggregate PPI-FD “Final Demand” year-to-year inflation rate of 10.0% in February still set a record high for this PPI series created in 2009.

• FLASH (Mar 10): Year-to-year inflation continued to surge in the both the February 2022 headline Consumer Price Index (CPI-U) and the ShadowStats-Alternate CPI, with both measures hitting new multi-decade highs, circumstances in place before Russia invaded Ukraine.

• February 2022 CPI-U annual inflation hit 7.87% [up from 7.48% in January], the steepest inflation pace since January 1982 (in 40 years); the ShadowStats “Corrected” Alternate CPI estimate hit 16.05% [up from 15.62% in January], the steepest inflation rate since June 1947 (in 75 years).

• In like manner, the January 2022 CPI-W (used in Social Security Cost of Living Adjustment [COLA] calculations, where the 2022 COLA -- based on Third-Quarter 2021 -- was 5.9%) hit a four-decade high of 8.60%, up from 8.23% in December.

• FLASH (Feb 24): Fourth-Quarter 2021 GDP Inflation -– the understated Implicit Price Deflator (IPD), the GDP’s inflation gauge -- hit its steepest reading in 40 years in its second estimate, with the year-to-year IPD change rising to 5.90% [previously 5.85%], highest since Third-Quarter 1982, and with the annualized quarter-to-quarter IPD at 7.15% [previously 6.89%], the highest since Third-Quarter 1981.

• F E D E R A L .. R E S E R V E – MONETARY CONDITIONS AND POLICY – FLASH (Mar 16): The March 2022 FOMC hiked its targeted Federal Funds Rate by 0.25%, as previewed recently by Federal Reserve Chairman Jerome S. Powell. The FOMC also indicated that ongoing increases “will be appropriate,” and that it expects to reduce its Balance Sheet, its holdings of Treasury securities, etc. “at a coming meeting.”

• Per Fed Chairman Powell, both the economy and the labor market are “very strong,” and higher interest rates were and are needed to dampen the resulting inflationary pressures. [ShadowStats contends that the surging inflation is due to factors such as Money Supply, not due to an overheating economy, and that there will be negative implications ahead for the U.S. economy, from surging interest rates.]

• (Mar 11): Based on weekly reporting of activity through March 9th, the level of the Monetary Base has reversed course in the last two weeks, now surging (accelerating) on top of what otherwise had been declining or leveled Reserve Balances with Federal Reserve Banks; such runs contrary to the recent “Tapering.”

• (Mar 4): [NOTE: Text here is as previously posted; with this note, where although down for the month of February, the last week, ended March 2nd, showed some gain.] Based on weekly reporting through March 2nd, ShadowStats estimates the February 2022 Preliminary Monetary Base continued in contraction from its December 2021 record high, hitting its lowest monthly level since June 2021, declining along with shrinking Depository Institutions’ Reserve Balances with Federal Reserve Banks, while Currency in Circulation component increased slightly to an all-time high level, with record high growth of 24.3% against its Pre-Pandemic Trough [see the SYSTEMIC RISK – MONETARY BASE Section].

• (Feb 22): Despite downside revisions to Deposits, the January 2022 Money Supply surged to historic high levels both in dollars and in growth against the February 2020 Pre-Pandemic/ Recession Trough (PPT), with the narrowest and most-liquid Money Measure “Basic M1” - Currency plus Demand Deposits – up by an unprecedented 110.4% from its PPT, and up from the December 2021 downwardly revised 104.3% [previously 107.4%] record; all other January Money Supply measures also hit historic dollar and growth levels.

• January growth in the current, broadest headline Money Supply Measure of M2 was up by an unprecedented 41.2% for that series, versus 39.6% in December, while the still-broader measure of the former M3 series (the Ongoing ShadowStats Estimate) was up by an unprecedented 33.5%, versus 32.1% in December - See extended comments in the SYSTEMIC RISK – MONEY SUPPLY Section (keep scrolling down).

• Still increasingly bullish for accelerating Inflation, these surging Money Supply numbers reflected FOMC Monetary Stimulus in place, net of the initial rounds of Fed “Tapering” reflected in the [then] softening Monetary Base

• P O L I T I C A L - FLASH (Updated Mar 16): RUSSIA-UKRAINE CONFLICT and the FOMC - Exacerbating already explosive inflation and negative economic prospects, the evolving Russia-Ukraine conflict continues as a major wild card for the domestic and global Financial and Commodity Markets and for U.S. domestic economic circumstances. Related impact on the economy and inflation are sharply negative and inflationary in the near-term. Explosive gains in oil and gasoline prices already are in play, likely spiking inflation and cutting near-term Consumer Liquidity from the standpoint of inflation-adjusted Real Disposable Income. Surging Gold prices also reflect an element of inflation expectations, beyond the traditional flight-to-safety characteristics.

The FOMC noted in its March 16th Statement, “...The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upside pressure on inflation and weigh on economic activity.” That said, again Chairman Powell’s basic pitch was that the overheated economy is spiking inflation.

• G E N E R A L .. H E A D L I N E S .. [Updated March 11th] -- Pandemic-driven U.S. Economic Collapse continues to harden in a protracted “L”-shaped non-Recovery, amidst high of risks of renewed Downturn and accelerating Inflation, now exacerbated by the unfolding Russia-Ukraine conflict.

-- Key Economic Series show not only that the Pandemic-driven Economic Collapse was worse than headlined, but also that the still-unfolding Recovery has been much weaker than indicated.

-- Severe Systemic structural damage from the Shutdown was forestalling meaningful Economic Rebound into 2023 or beyond, irrespective of Coronavirus vaccinations, and pre-Russia-Ukraine conflict.

-- Unlimited Federal Reserve Money Creation and Federal Government Deficit Spending likely will continue to accelerate domestic Inflation, despite FOMC’s “Tapering” and a March 16th quarter-point Interest Rate hike

-- With fundamental U.S. Dollar debasement (inflation) intensifying, holding physical Gold and Silver protects the purchasing power of One’s assets, irrespective of any near-term Central Bank or other machinations to the contrary.

Scroll down for the latest ShadowStats Outlook, Headline Economic News and Background Information on the U.S. Economy, Financial System (FOMC), Financial Markets and Alternate Data, also for publicly available Special Reports and contact information.

• L A T E S T .. N U M B E R S Expanded discussion and graphs of the key Economic and Inflation series follow in pending Commentaries. More-detailed analysis of the latest numbers headlined earlier in this DAILY UPDATE begins here with the most-recent release, followed by others in reverse chronological sequence: .. INDUSTRIAL PRODUCTION – February 2022 Industrial Production gained a consensus 0.5% month-to-month, which largely was due to downside revisions to activity in each of the January 2022 Manufacturing, Mining and Utilities sectors. Net of prior period revisions, aggregate Production gained 0.1% in the month. (March 17th, Federal Reserve Board – FRB). December 2021 activity also revised lower, across the board. In like manner, Capacity Utilization rose to 77.6% February 2022, its highest level since May of 2019, up from a downwardly revised 77.3% [previously 77.6%] in January 2022, but still shy of its August 2018 all-time high of 79.9%. The falloff in activity after that non-recovered 2018 peak largely was due to a series of FOMC rate hikes.

An ongoing cautionary note here for the FOMC: Looking at headline detail, exaggerated against bad-weather impact in February 2021, February 2022 Industrial Production annual growth was 7.5%%, up from 3.6% in December; yet, with the aggregate series up by just 2.2% from its February 2020 Pre-Pandemic Peak, Pandemic distortions and disruptions continue to shape the headline numbers. That said, February 2022 Industrial Production still held shy by 0.6% (-0.6%) of ever recovering its August 2018 all-time high, again, the drop from which was driven by an extended round of FOMC rate hikes, from the 2014 rate trough, coming out of the lingering impact from the disruptions of the Great Recession (last time rates were as low as they were before March 16th), as will be discussed in No. 1461.

By major component, February 2022 MANUFACTURING gained 2.9% versus its Pre-Pandemic Peak (PPP), but held shy by 0.4% (-0.4%) of ever recovering its August 2018 peak. Annual Manufacturing rose to 7.4% in February 2022, up from 2.2% in January 2022 (again year-go weather disruptions in February 2021). MINING held shy of recovering its PPP by 5.3% (-5.3%) in February 2022, against an annual year-to-year gain of 17.3% (weather distortion), up from 6.9% annual in January 2022. Separately, the remaining UTILITIES Sector tends to be randomly volatile. As of February 5.4%, it had gained 8.59% against its PPP. The Production numbers discussed here are in context of a previously “not recognized” economic contraction revealed in the Federal Reserve’s extraordinary, May 28, 2021 multi-year major benchmark revisions, discussed previously in No. 1460a with an extended assessment in pending No. 1461. The Fed anticipates a new round of benchmark revisions to be published in Second-Quarter 2022.

(March 17) NEW RESIDENTIAL CONSTRUCTION – As usual, the reporting of headline February 2022 Housing Starts effectively was meaningless (Census Bureau). Total Housing Starts gained by a headline 6.8% in the month with a 90% confidence interval of +/-14.9%, which encompasses zero growth. Year-to-year change was up a meaningful 22.3% +/- 14.3%, but that was only due to extreme hit to the series from bad weather in February 2022. Those changes were against respective upside to January and December activity. Per the issuing Census Bureau: “If the 90 percent confidence interval includes zero, there is insufficient evidence to conclude that the actual change is different from zero.”

The statistically more-stable Building Permits series went through a major overhaul, starting with the January 2022 data. Per the Census Bureau, with the Survey design changed from a representative sample to a cut-off sample. This change allows complete local and county data on new housing units authorized by permits to be published monthly going forward.” Such is a positive move that promises better quality data in the year or so ahead. That said, seasonally-adjusted February 2022 Permits declined by 1.9% (-1.9%) in the month but gained 7.7% year-to-year, while January 2022 Permits gained a revised 0.5% [previously 0.7%] in the month and revised 0.6% year-to-year, against the now not-comparable prior reporting of January and February 2021.

(March 16) RETAIL SALES – February 2022 inflation-adjusted Real Retail Sales declined month-to-month by 0.5% (-0.5%) having gained a upwardly revised 4.2% [previously 3.1%] gain in January 2022, against the collapsed 2021 Holiday Shopping Season (Census). That said February 2022 Real Retail Sales held shy by 1.8% (-1.8%) of recovering its April 2021 Pandemic Peak Level, even though it was 14.1% above its February 2020 Pre-Pandemic Peak. The November and December 2021 Holiday Shopping Season saw the weakest monthly Real Retail Sales since 2008, at the depths of the Great Recession. Despite the recent continual boosting of headline, monthly Nominal Retail Sales by raging consumer price inflation, coincident faltering product demand during the peak shopping months of November and December 2021 was even greater. In nominal terms, before inflation adjustment, seasonally adjusted month-to-month changes in Retail Sales for November and December 2021, and January and February 2022, respectively were 0.7%, -2.7%, 4.9% and 0.3%%, with respective annual growth rates of 18.9%, 16.6%%, 14.0% and 17.0%. Net of inflation, in real terms, those respective monthly changes were 0.0%, -3.2%, 4.2% and -0.5%, with annual real growth of 11.3%, 8.8%, 6.0% and 9.0%. ShadowStats standardly removes growth due to inflation from the headline Nominal Retail Sales series, reporting Real Retail Sales in real, inflation-adjusted terms, deflated by the seasonally-adjusted Consumer Price Index (CPI-U), as otherwise calculated by the St. Louis Federal Reserve.

(March 15) PRODUCER PRICE INDEX – The February 2022 Final-Demand PPI headline annual inflation rose to a record 10.0% [9.99%] on top of an upside revision to January’s annual inflation also to 10.0% [9.97%, previously 9.65%] (March 15th, Bureau of Labor Statistics - BLS). This Final Demand Series, created in 2009 is a combination of a traditional “Goods” Sector, and what I consider to be largely meaningless “Services” Sector numbers modeled so as to decline when gasoline prices are rising [February Services Sector was unchanged at 0.0% on top of upside revisions]. Final-Demand Goods rose by 2.4% in the month, following an upwardly revised 1.5% [previously 1.3% in January]. Unadjusted year-to-year Goods inflation of 14.4%, up from a revised 13.4% [previously 13.1%] still was shy of the 14.8% record high for this series set in November. The related “Finished Goods” in the old series, however was at a 40-year high. Headline unadjusted Construction Inflation continued to surge year-to-year from a series record (post-2009) of 16.0% [previously 16.1%] in January 2022 to 16.6% in February 2022. Such likely will take a continuing large bite out of inflation-adjusted Real Growth in pending February Construction Spending.

(March 14) CASS FREIGHT INDEX® - The February 2022 Cass Freight Index® rebounded month-to-month and year-to-year, subsequent to collapsing activity in January that was blamed on deteriorating Pandemic (Omicron) conditions. February activity gained month-to-month by a seasonally adjusted by 3.6% [by 8.6% unadjusted], having plunged in January by an adjusted 7.4% (-7.4%) [by 10.8% (-10.8%) unadjusted]; unadjusted February 2022 activity gained 3.6% year-to-year, having dropped by 2.9% (-2.9%) in January 2022 (CassInfo.com - See the full detail and report at https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/february-2022). Cass opened its report on February 2022 activity, noting that, “The 3.6% m/m (SA) increase in the shipments component of the Cass Freight Index reversed almost half of the 7.4% Omicron-related decline in January.” Although the February 2022 activity had regained its Pre-Pandemic Peak by 8.3%, it still remained shy by 5.0% (-5.0%) of ever recovering its 2018 economic peak, which also signaled the historic peak in the Industrial Production series, as highlighted in the most-recent annual benchmarking of that series [see Nos. 1460a and 1460b]. A heretofore unrecognized, FOMC-triggered 2018 economic downturn/ slowdown was ongoing into the onset of the March 2020 Pandemic Shutdown. -- ShadowStats regularly follows and analyzes the Cass Freight Index® as a highest-quality coincident and leading indicator of underlying economic reality. We thank Cass for their permission to graph and to use their numbers in our Commentaries.

(March 11)CONSUMER SENTIMENT - University of Michigan’s Preliminary Estimate for the March 2022 Index of Consumer Sentiment plunged to new 10-year and Pandemic troughs (University of Michigan). Surveys of Consumers Chief Economist Richard Curtin noted that “Consumer Sentiment Continued to decline due to falling inflation-adjusted incomes ...” Go to http://www.sca.isr.umich.edu for the details.

(March 10) CONSUMER PRICE INDEX – February 2022 headline Annual Inflation continued surging to new four-decade high levels, coming in about as expected, not yet reflecting impact from the Russian invasion of Ukraine. (March 10th, Bureau of Labor Statistics -BLS). Headline February 2022 Consumer Price Index (CPI-U) Inflation set a new 40-year high of 7.87%, up from 7.48% in January, 7.04% in December 2021 and 6.81% in November.

Separately, more significant functionally than the CPI-U for those receiving Social Security, for example, the unadjusted February 2022 year-to-year inflation rate for the U.S. Government’s CPI-W (all Urban Wage Earners) measure jumped to 8.60%, from 8.23% in January and 7.81% in December 2021. That was up from 7.57% and 6.88% in November and October, the strongest inflation reading in 40 years, just shy of what was then declining headline 8.63% inflation in December 1981. A meaningful difference here for those receiving inflation-adjusted payments from the U.S. Government is that February 2022’s CPI-W was up by 268 basis points from its Third-Quarter 2021 average of 5.92%, which used to set the 2022 Social Security annual Cost of Living Adjustment (COLA) back in September, at a rounded 5.9%, which then was a 39-year high. At the same time, the ShadowStats Alternate CPI Measure had indicated that a 13.9% adjustment would have been much closer to common experience, although the ShadowStats number now is 16.0%. Nonetheless, the headline 2022 COLA topped the 5.8% prior high of 2008 and will be at a 39-year high, against an earlier peak of 7.4% in 1982. The heavy inflation being seen now will not be worked into in any Federal COLA payment adjustments until 2023.

The ShadowStats Alternate CPI Annual Inflation Index level (1980 Base) broadly has been confirmed by the general movements of, and increases in the Price of Gold since President Nixon closed the Gold Window in 1971. That is reviewed and detailed anew in pending No. 1461. Designed to reverse the inflation-reduction methodological gimmicks of the early 1980s, and after, the headline ShadowStats Alternate Inflation Index in February 2022 jumped by 16.0% year-to-year, up from 15.6% in January, 15.1% in December 2021 and 14.9% in November, with the headline February inflation at its strongest reading since 17.6% in the traditional CPI of June of 1947, topping an interim peak of 14.8% in March of 1980, when the headline CPI of the time still was the same series that would become the ShadowStats Alternate Inflation Series, after January 1982. Again, the 1980 readings are consistent with, but predate the ShadowStats series, when the headline CPI still was reported on a reasonably consistent basis over time. The ShadowStats Alternate CPI-U estimate restates current headline inflation so as to reverse the government’s inflation-reducing gimmicks of the last four decades, which were designed specifically to reduce/ understate annual Cost of Living Adjustments to Social Security payments. Related graphs and methodology are available to all on the ALTERNATE DATA tab. Subscriber-only data downloads and an Inflation Calculator also are available there.

Political and functional benefits to the Federal Government and Federal Reserve of using understated headline Inflation numbers: (1) Cost of Living Adjustments (COLA) are understated [reducing Federal Government outlays and easing Federal Deficit pressures]. (2) Inflation-adjusted real Economic Growth is boosted artificially. (3) Policy goals of contained Inflation and positive Economic Growth are easier to meet. Political advantage for the Federal Government and/or the Federal Reserve in their use of understated headline inflation numbers, will be reviewed in No. 1461 and expanded upon in updated versions of the “Special Commentaries” currently available on the above-linked CPI and GDP ALTERNATE DATA Tabs (including comments from former Congressional Leaders and a Fed Chairman). Systemic gains are both financial and political. From a pure dollars standpoint, payments made against understated “Inflation Adjustments” including COLA, reduce government costs. Combined with the artificially boosted, inflation-adjusted economic growth, understated headline inflation creates less challenging environments for the financial and economic targets of the Federal Reserve. [Please note: Anyone who has questions on or would like to discuss the ShadowStats Alternate-CPI Methodologies, current circumstances or otherwise, please call me at (707) 763-5786, or e-mail me at johnwilliams@shadowstats.com; I always am happy to talk].

(March 8)U.S. TRADE DEFICIT – The January 2022 U.S. Real Merchandise Trade Deficit deepened by 5.7% (-5.7%) in the month, to a record shortfall, against the prior December record shortfall that widened by 0.5% (-0.5%) in revision, and in context of record quarterly and annual Deficits, for Fourth-Quarter and Full-Year 2021 (March 8th, Census Bureau and the Bureau of Economic Analysis - BEA). Reflecting shrinking Exports and rising Imports, the January 2022 Real Merchandise Trade Deficit deepened at to a record annualized monthly pace of $1.416 (-$1.416) trillion (chained 2012 dollars), following a record annualized quarterly pace of $1.273 (-$1.273) trillion, and record annual pace for all of 2021 of $1.235 (-$1.235) trillion, against full-year deficits of $1.043 (-$1.043) trillion in 2020 and $0.995 (-$0.995) trillion in 2019 (pre-Pandemic). A deteriorating Trade Balance is a drain on headline Gross Domestic Product (GDP) growth, reflected in the Net Exports account. In nominal terms, before inflation adjustment, the Balance of Payments (Goods and Services) Deficit widened by 9.4% (-9.4%) in the month, also reflecting a decline in Exports and jump in Imports, on top of a 1.5% (-1.5%) deepening of the Deficit in December. For the Full-Year 2021, the record annual Deficit deepened to a revised $861.4 (-$861.4) [previously $859.1 (-$859.1) billion in 2021, versus an unrevised $676.7 (-$676.7) billion in 2020.

(March 4) PAYROLL EMPLOYMENT AND UNEMPLOYMENT – February 2022 U.3 Unemployment declined by 0.2% (-0.2%), to 3.8%, amidst deteriorating economic conditions, which drove both the U.6 and the ShadowStats Unemployment measures higher by 0.1%; while Payroll Employment jumped by 0.7 million in the month, but still held shy by 2.1 (-2.1) million jobs of recovering its Pre-Pandemic Peak (BLS). Stronger than expected February 2022 Payroll Employment gained 678,000, on top of upside revisions to activity in December and January, That said, February’s Payroll level still held shy by 1.4% (-1.4%) of recovering its February 2020 Pre-Recession (Pre-Pandemic) Peak, narrowed from a revised 1.8% (-1.8%] [previously 1.9% (-1.9%)] shortfall in January. That shortfall remained deeper than the Payroll trough seen at the depths of 1980 Recession. Separately, relatively stable pre-Pandemic Payrolls tended to add about 200,000 jobs per month, reflecting the net of job-market entrants, such as students entering the work force, less those, such as retirees leaving the labor force. Accordingly, absent the Pandemic, today’s headline payrolls were shy by about 6.9 (-6.9) million or 4.4% (-4.4%) from where employment might have been under normal circumstances, absent the Pandemic.

The Bureau of Labor Statistics reported the seasonally adjusted headline U.3 unemployment rate at 3.8% (3.82%) in February 2022, down from 4.0% (3.98%) in January and against 3.9% (3.89%) in December 2021. The headline broader U.6 unemployment rate was 7.2% (7.18%) in February, up from 7.1% (7.12%) in January and against 7.3% (7.25%) in December. That narrowing of headline U.3 unemployment to 3.82% from 3.98% reflected a net gain of 548,000 “employed” individuals, yet 418,000 or 76% of that increase was in persons employed part time for economic reasons, including “slack work or business conditions” or “could only find part-time work.” Despite that happy drop in U.3, the broader U.6 and ShadowStats Alternate Unemployment notched higher.

The ShadowStats Ongoing Alternate Unemployment Estimate for February 2022 reflected the continuing migration of short-term discouraged workers in U.6 to the netherworld of the long-term discouraged workers (those no longer counted by the BLS, subsequent to the allotted one year of permissible discouragement). Including those long-term discouraged/ displaced workers, on top of U.3 and U.6, the February 2022 ShadowStats Alternate Unemployment Rate notched higher to 24.6%, versus 24.5% in January and December, still down from 24.7% in November and 25.0% in October. The latest Unemployment Rates are posted and graphed on the ALTERNATE DATA Tab (above).

(March 1) CONSTRUCTION SPENDING – Net of surging Construction Inflation, Real January 2022 Construction Spending continued in month-to-month and year-to-year contraction (Census). Nominal January 2022 Construction Spending gained 1.3% month-to-month (+/-1.0%, 90% confidence interval), a marginally significant gain on top of upside revisions to December and November activity. January 2022 nominal year-to-year activity also gained a meaningful 8.2% (+/-1.2%). In context of the continuing surge in Construction Inflation, however, net of the respective January 2022 month-to-month and year-to-year Producer Price Index Construction Inflation readings of 3.6% and 16.1%, Real Construction Spending contracted both month-to-month and year-to-year in January 2022. On early track for a First-Quarter 2022 quarterly contraction, that would the fourth consecutive quarterly decline if the current trend continued.

(February 25) NEW ORDERS FOR DURABLE GOODS - In context of soaring Inflation and a 15.6% monthly surge in January 2022 Nominal New Orders for Non-Defense [Commercial] Aircraft, on top of an upwardly revised 22.3% gain [previously a decline of 14.4% (-14.4%)] in those orders for December, Real New Orders for Durable Goods gained by 0.6% in January 2022, up from a revised 2.8% gain [previously down by 1.5% (-1.5%)] in December 2021 (Census) Net of Inflation and those volatile Commercial Aircraft Orders, January 2022 orders were down month-to month by 1.2% (-1.2%) [versus a revised drop of 0.7% (-0.7%) in December], and down year-to-year by a Pandemic distorted 2.9% (-2.9%) [versus down by a revised 0.1% (-0.1%) in December]. That said, Real New Orders, net of Commercial Aircraft, were up by 1.2% in January 2022 against their February 2020 Pre-Pandemic Peak.

(February 24 – Updated March 1 for the Atlanta Fed) GROSS DOMESTIC PRODUCT – The minimally revised second estimate of Fourth-Quarter 2021 GDP reconfirmed significant issues with the purported “Economic Recovery” from the Pandemic-Driven Economic Collapse (BEA). Against revised headline annualized real quarterly Fourth-Quarter 2021 GDP growth of 6.99% [previously 6.89%], and unrevised Third-Quarter growth of 2.30%, Final Sales (GDP net of Inventory Change) respectively gained only 2.02% [previously 1.88%] in Fourth-Quarter 2021 and just 0.08% in Third-Quarter 2021. The problem remains a massive involuntary inventory buildup due to a significant faltering in consumer demand (see the later RETAIL SALES Section). Specifically consider that of the headline 6.99% annualized real GDP growth, 4.97% was due to a buildup in unsold inventories. With broad weakness continuing in Payroll Employment, the March 2022 FOMC should look at doing some back peddling as to timing an Interest Rate Hike. An overheating economy is not driving inflation, as discussed later. Raising interest rates now only would pummel real growth in an otherwise not recovered and not robust U.S. Gross Domestic Product.

As headlined, Real Fourth-Quarter 2021 GDP gained at a revised annualized pace of 6.99%, up from 2.30% in Third-Quarter 2021, with a year-to-year Fourth-Quarter gain of 5.56% up from 4.95% in the Third-Quarter. Against its Pre-Pandemic Peak, Fourth-Quarter GDP was up by 3.14%, in positive territory since Second-Quarter 2021. In contrast, the ShadowStats Alternate GDP, based on the headline GDP, corrected for the understatement of GDP inflation (which has the effect of overstating real [inflation-adjusted] growth) still remained shy of recovering its Fourth-Quarter 2019 Pre-Pandemic Peak by 0.99% (-0.99%) [previously 0.96% (-0.96%)], the updated ShadowStats Alternate GDP has been posted to the GDP ALTERNATE DATA TAB and will be reviewed extensively in pending No. 1461]. Real year-to-year change in Fourth-Quarter 2021 ShadowStats GDP was 3.42% [previously 3.40%], versus 2.82% in Third-Quarter 2021, again, down by 0.96% (-0.96%) from its Fourth-Quarter 2019 Pre-Pandemic Peak, where Third-Quarter 2021 was down by 2.12% (-2.12%).

Separately, Fourth-Quarter 2021 GDP inflation hit its steepest reading in forty-plus years, with the year-to-year change in the Implicit Price Deflator (IPD), rising to 5.90% [highest since Third-Quarter 1982], and with the annualized quarterly IPD at 7.15% [highest since Third-Quarter 1981].

(February 24/18) HOME SALES – Given a statistically insignificant monthly decline of 4.5% (-4.5%) +/-16.2% at a 90% confidence interval, not meaningfully different from zero, January 2022 New-Home Sales (NHS) activity could have been a gain or a loss (Feb 24 - NHS, Census). The headline year-to-year decline of 19.3% (-19.3%) +/-15.2%, however was meaningful at the 90% confidence interval. That earlier month-to-month decline, however was on top of a net upside revision to December activity of 3.5%, which separately was on top of upside revisions to both November and October. Once again, as commonly is the case, however, where Census Bureau Housing Statistics almost always are not meaningfully different from zero, the Census Bureau might do well to delay publishing these numbers by one or two months, until there are meaningful readings. That said, although headline January 2022 activity was down year-to-year by 19.3% (-19.3%), it was up by 9.7% against its Pre-Pandemic Peak.

Traditionally more-stable and statistically significant reporting of Existing-Home Sales (EHS) gained 6.7% in January 2022, having declined by a revised 3.8% (-3.8%) [previously by 4.6% (-4.6%)] for the month in December 2021. (EHS, Feb 18, National Association of Realtors® - NAR®). Year-to-year Existing-Home Sales (NAR®) declined by 2.3% (-2.3%) in January 2022, following a drop of 8.4% (-8.4%) in December. Yet, those numbers reflected Pandemic effects to certain extent, where January 2022 and December 2021 sales were up respectively by 14.0% and 6.8% from their Pre-Pandemic Trough of February 2020.

(September 14) ANNUAL SURVEY OF INCOME AND POVERTY – Measuring the Pandemic’s Toll on Household Income - In Context of Extreme, Pandemic-Driven Disruptions to Economic Activity and Coincident Census Bureau Surveying Quality, the 2020 Poverty Rate Surged and Real Median Household Income Plunged (Census). The Census Bureau’s annual survey of “Income and Poverty in the United States: 2020” was published September 14th, with full recognition by Census Bureau that its surveying quality in both March 2020 and 2021 was disrupted and skewed heavily by the vagaries of the Pandemic’s disruptions. That said, Census went through extensive modeling, using prior, established Household characteristics to adjust the 2020 surveying for skewed reporting.

Inflation-adjusted 2020 Real Median Household Income of $67,521 [in 2020 dollars] dropped by a statistically significant 2.9% (-2.9%) from 2019, the first decline since 2017, the first statistically significant decline since 2011. In that context, the total number of people with earnings in 2020 versus 2019 dropped by about three million. At the same time, the number of people employed full-time, year round dropped by about 13.7 (-13.7) million.

The number of people Living in Poverty in the United States in 2020 was estimated at 37.3 million, up by about 3.3 million or 9.7% from 2019. The official Poverty Rate in 2020 was 11.4%, up from 10.5% in 2019. As noted by the Census Bureau, “This is the first increase in poverty after five consecutive annual declines.” As an aside, the Census Bureau uses the lowest possible inflation rates (CPI-U Research Series) for deflating economic activity in its annual report. That means the resulting, inflation-adjusted detail here shows significantly overstated (overly positive) economic and income numbers). ShadowStats will publish a separate and extended analysis in a later Commentary.

• B U S I N E S S .. C Y C L E -- RECESSION-DEPRESSION TIMING – February 4, 2021 -- The 2020 Economic Collapse Remains Far from Recovery. The 2020 Pandemic-Driven Recession was timed by the defining National Bureau of Economic Research (NBER), from Peak-to-Trough, as from February 2020 to April 2020 [2 months, the shortest on record] and from Fourth-Quarter 2019 to Second-Quarter 2020 [2 quarters]. That said, in Business Cycle definitions, an economic downturn traditionally has been known as a “Depression,” which has two components the “Recession” and the “Recovery.” After the economic terror of the Great Depression, economic downturns took on the less-frightening “Recession” nomenclature. The NBER called an end to the 2020 Recession on July 19th, again, just the first leg of the Depression. Recessions are measured only from Peak-to-Trough, while Recoveries are measured from Trough-to-Regaining-the-Pre-Recession-Peak (timing not formally called by the NBER), which is far from being at hand, despite relative strength in some major numbers such as the GDP. Thereafter, an “Expansion” is in place until the next formal “Peak,” which, the NBER does time.

Consider -- Despite significant Recovery off the Pandemic-Driven Economic Trough of April 2020, the February 2022 Payroll Employment current shortfall against its February 2020 Pre-Pandemic/ Recession Peak remained weaker than the Payroll Employment Troughs of the 1980 Recession. Current employment/ economic conditions will be assessed and reviewed by major Industry in the pending No. 1461. Aside from some short-term reporting gimmicks, Payroll Employment probably is the highest-quality economic statistic published by the U.S. Government, at present, given current data- and reporting-compromised conditions of the still-evolving Pandemic. The Employment series is based on actual Payroll Taxes paid by Employers, as opposed to irregular (Pandemic-induced, telephone-only) impaired surveys of the Public as to Unemployment. While Payroll Employment has recovered meaningfully from its April 2020 bottom, February 2022 activity still was shy by 1.4% (-1.4%) of recovering its February 2020 Pre-Recession (Pre-Pandemic) Peak activity, narrowed from a revised 1.8% (-1.8%) in January, still a deeper shortfall than at the trough of Payroll activity in the 1980 Recession.

With numerous, separate indications of the economy stalling or turning down anew (see the earlier Retail Sales, Industrial Construction Spending, Consumer Sentiment, CASS comments), although broadly ignored at present, in practice, such should be a major economic consideration for the FOMC, despite its accelerated “Tapering” as announced at the December 2021 and January 2022 meetings and its planned 0.25% Interest Rate hike at the pending March 15-16 meeting.

Economic, FOMC, financial-market, political and social circumstances all continue to evolve along with the Pandemic and unfolding political circumstances. COVID-19 vaccines and improved treatment have helped to stabilize a relatively low level of economic activity, again far from full recovery, yet new Pandemic issues, including new variants and vaccination controversies, continue to surface. At present, full economic recovery is not likely until 2023 or after. Many segments and regions of the U.S. economy, and individual, personal circumstances have suffered, and continue to suffer severe structural damage from the shutdown, areas that likely will take years to recover fully. Accordingly, ongoing massive Fiscal and Monetary Stimuli will be needed, and they likely will expand well into 2022, irrespective of hypothetical FOMC “tightening.” As demonstrated in recent decades, FOMC stimulus likely will remain in play, as targeted by the FOMC, primarily, in order to prevent a collapse in the Banking System, which owns and controls the Federal Reserve. [See the OPENING HEADLINES.]

• S Y S T E M I C .. R I S K -- March 16th (with Monetary Base updates to March 13th) FEDERAL RESERVE – MARCH 2022 FOMC [See the following MONEY SUPPLY and MONETARY BASE Sections for latest details] The March 2022 meeting of the Federal Reserve’s Federal Open Market Committee (FOMC) raised its targeted Federal Funds Rate by 0.25%, from a range of 0.00% to 0.25%, to 0.25% to 0.50%. Yet, the FOMC refrained from reducing its Balance Sheet, other than to indicate it expects that to begin “at a coming meeting.” The Federal Reserve’s Federal Open Market Committee (FOMC) announced in the key paragraphs of its abbreviated January 26th Press Release:

“Indicators of economic activity and employment have continued to strengthen. Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

“ The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term, the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.”

(February 22nd) MONEY SUPPLY – January 2022 Money Supply growth continued to explode, with all major measures at new peak levels of activity and at historic-high levels of growth against their February 2020 Pre-Pandemic Troughs (Federal Reserve Board – FRB, ShadowStats). The Historic Money Supply Tables and Graphs through January 2022 have been updated on the ALTERNATE DATA TAB (see the Menu Bar above). Where the Pandemic hit the U.S. economy and financial system hard in March and April 2020, the Federal Reserve responded with massive expansion of the Money Supply -- Systemic Liquidity. Accordingly, comparative year-to-year change in the various March 2021 to January 2022 Money Supply measures against the heavily spiked year-ago activity tend to be depressed, against what otherwise would be the change versus the February 2020 Pre-Recession or Pre-Pandemic Trough (PPT), effectively the “Base Circumstance,” before the Pandemic emergency liquidity surge. Accordingly, the March 2021 to January 2022 growth rates here generally are shown against the PPT. Background definitions and related detailed discussion, historical data and graphs for each of the Money Supply Series were covered in Benchmark Commentary No. 1459, with updated and expanded details pending in No. 1461. The Fed’s release of February 2022 Money Supply details is scheduled for 1:00 p.m. ET, March 22, 2022.

Here is how the January 2022 Money Supply numbers shaped up. ShadowStats “Basic M1” (Currency plus Demand Deposits [83% of the “old” pre-May 2020 M1]) surged by an historic 110.4% in January 2022, up from a downwardly revised 104.3% [previously 107.4%] in December 2021 against the February 2020 Pre-Pandemic Trough. In contrast, the Pandemic-distorted year-to-year gain for January 2021 eased to 29.4%, from a downwardly revised 29.5% [previously 31.5%] in December 2021. In like manner for the broader Money Supply measures, January 2022 activity versus the February 2020 Pre-Pandemic Trough for the newly redefined (post-May 2020) headline M1 (now including Savings Deposits, at about 92% of M2) was up by an unprecedented headline 414.1% versus 408.4% [previously 410.2%] in December, but such continues on a nonsensically inconsistent definitional basis. Separately, all as measured against pre-Pandemic troughs, traditional M2, which has not been redefined, was up by a record 41.2% in January 2022, versus 39.6% [previously 39.9%] in December 2021, while the broadest ShadowStats “Ongoing-M3” Estimate was up by a record 33.5% in January 2022, versus 32.1% [previously 32.3%] in December 2021. The flight of cash to relatively greater liquidity and safety in the narrower Money Supply measures continues, unabated.

(Updated March 13th) MONETARY BASE – The weekly Monetary Base numbers surged in the week ended March 9th, following some minimally positive stabilization the week before; all coincident with deteriorating circumstances tied to the Russian invasion of Ukraine (Federal Reserve Board - FRB, ShadowStats). That bounce in the Monetary Base did not signal a pending shift in policy at the FOMC, perhaps it is just a short-lived bounce tied to systemic disruptions surrounding the Russian invasion and related global systemic disruptions. Previously the Fed’s “Tapering,” shrank Bank Reserves with Federal Reserve Banks, more than some minimally offsetting, continuing increase in Cash in Circulation, with the effect that the ShadowStats’ Preliminary Estimate of the February 2022 Monetary Base pulled back sharply from its December 2021 historic high level and cycle-high growth rates against its February 2020 Pre-Pandemic/ Recession Trough, its weakest showing since June 2021. Where the aggregate Monetary Base often moves broadly on a parallel basis with the Money Supply, it also can vary widely with the Money Supply, tied to the dominance of its movements triggered by Bank Reserves held by Federal Reserve Banks. Unlike the Money Supply at present, even before the onset of “Tapering,” the Monetary Base was not close to its record annual growth levels, previously seen during the 2007-2008 Banking System Collapse, which at the time exploded Reserve Balances (up 5,000 percent year-to-year, but never reversed in parallel in a post-Crisis movement). Monetary Base growth, against its February 2020 Pre-Pandemic Trough, had risen to a cycle high of 85.6% in December, against 85.1% in November, but pulled back to 76.7% with in January 2022, with continued softening to 74.5% in the Preliminary Estimate for February 2022 (based on numbers through the week-ended March 2nd [updated Mar 4]). Where that earlier gain was dominated by growth in December 2021 Reserves increasing to 152.7% against the Pre-Pandemic Trough of February 2020, versus 152.3% in November, it still was shy of the 153.1% peak in September, falling back to 133.6% in January 2022, and now to 128.9% in the Preliminary February 2022 reporting, its weakest showing since June 2021. That said, February 2022 Cash in Circulation, the other part of the Monetary Base, marginally set record levels of activity and growth. Graphs and extended detail follow in No. 1461.

Systemic Turmoil is still evolving, with both the Federal Reserve and U.S. Government continuing to drive uncontrolled U.S. dollar creation, between unconstrained Money Supply growth (irrespective of current “Tapering”) and uncontained Deficit Spending, with U.S. Budget Deficit Breaking to a Record $30 Trillion. Again, with the recovery from the Pandemic-driven collapse retrenching and flub-a-dubbing, continued extraordinary Monetary and Fiscal Stimulus likely will continue well into this year (2022), and quite likely into 2023, reflecting continuing evolution of the Pandemic, and despite Financial-Market huffing and puffing to the contrary, and bi-furcated FOMC happy hype. Indeed, setting up accelerating inflation or hyperinflation, current extreme Monetary and Fiscal stimuli likely will be expanded. Discussions on the inflation threat and re-accelerating money growth are found in Special Hyperinflation Commentary, Issue No. 1438, subsequent missives including particularly No. 1451, No. 1454, No. 1460b and pending No. 1461.

(Updated - February 18th) U.S. GOVERNMENT FISCAL CONDITIONS/ CRISES – Grievously malfeasant U.S. Government fiscal policies continue to contribute meaningfully to the rapidly accelerating pace of U.S. Inflation. Having a largely nonfunctional Executive and Congressional branches of the U.S. Government does little to help stabilize the domestic Economy or Inflation. Congress again has delayed a looming U.S. Government Shutdown, this time until March 11th. Prior Congressional actions had raised the Debt Ceiling by $2.5 trillion, then pushing the continuing Fiscal Crisis off until early 2022. Previously (December/September 2021) the Congress avoided a near-term shutdown, using delaying tactics at the end of Fiscal-Year 2021 (September 30th) to forestall a shutdown until December 3rd, and ongoing political games generated another series of rolling delays of fiscal incontinence. Any solid developments in the ever-deepening U.S. Government Fiscal Crisis will be covered here in the SYSTEMIC RISK Section. That said, again, Fiscal Years 2021 and 2022 (FY2021, FY2022) circumstances deteriorated and have deteriorated meaningfully, at an accelerating pace, from conditions at the end of FY2020 (see the next paragraph), exploding anew into the unfolding, disastrous FY2022. Further discussion follows in pending No. 1461.

(April 6, 2021) U.S. Government 2020 Financial Statements. -- The deepening deficit net worth of the U.S. Government’s financial condition hit a record shortfall – negative net worth – of $113.8 trillion in Fiscal Year 2020 (year-ended September 30), widening from a $103.4 trillion negative net worth in 2019. That 2020 shortfall reflected an operating deficit “Net Position” or operating negative net worth of $26.8 trillion in 2020, widening from a Net Position deficit of $23.0 trillion in 2019, plus deepening unfunded Social Security and Medicare net liabilities (Closed Group) of $87.0 trillion in 2020, versus $80.4 trillion in 2019. As did her predecessors, Treasury Secretary Janet L. Yellen described the current “Fiscal Path” as “Unsustainable,” with the government’s current Debt-to-GDP ratio at 100% in 2020, predicted to go to 623% before the end of the Century. Those indications are overly optimistic in the extreme. Allowing for the “Unfunded” Liabilities, the Debt-to GDP ratio was 531% in fiscal 2020. The 2020 Financial Report is available here: https://www.fiscal.treasury.gov/reports-statements/financial-report/ -- ShadowsStats will provide extended analysis in a pending updated Hyperinflation Commentary.

SHADOWSTATS ALERT: [March 13 - Updated text tied to early indications of a potential shift towards a resurgent Monetary Base.] – The Russia-Ukraine crisis continues to generate near-term volatility in the domestic and global financial- and commodity-markets, exacerbating accompanying risks, and at the same time exacerbating systemic risks for the still-evolving Coronavirus Pandemic and related economic disruptions and crises. Accordingly, the FOMC’s near-term financial-market policy conundrum of both creating Money Supply and trying to kill Inflation, at the same time, has no happy resolution, other than letting Inflation run its course. Nonetheless, the Fed hiked interest rates a quarter of a point at its March 15-16 FOMC Meeting by the expected quarter-point. Given the underlying moribund Economy, raising rates at this point likely will only exacerbate deteriorating economic conditions, without providing any inflation relief.

Current liquidity and political risks and issues are intensified by potential Hyperinflation, long viewed by ShadowStats as the ultimate fate of the U.S. Dollar. Shy of a near-term happy resolution to the Russia-Ukraine Crisis, the Crisis has only exacerbated the ShadowStats Hyperinflation outlook of the last year or so, where:

“Despite recent relative weakness in gold prices and related Central Bank or other market machinations, the ShadowStats broad outlook in the weeks and months ahead has remained for: (1) A continuing and renewed deepening (potentially hyperinflationary) U.S. economic collapse, reflected in (2) Continued flight to safety in precious metals, with accelerating upside pressures on gold and silver prices, (3) Mounting renewed selling pressure on the U.S. dollar, against the Swiss Franc and other stronger currencies, and (4) Despite recent extreme Stock Market volatility and current near-record high levels in the popular U.S. stock-market indices, high risk of major instabilities and heavy stock-market selling continues, complicated by ongoing direct, supportive market interventions arranged by U.S. Treasury Secretary Yellen, as head of the President's Working Group on Financial Markets (a.k.a. the ‘Plunge Protection Team’), or as otherwise being gamed by the Federal Reserve.”

• P L A N N E D .. P O S T I N G S .. (Updated – March 17th) Where the ShadowStats Commentary publication schedule remains fluid, I look to post long-pending Economic Commentary No. 1461 over the coming Weekend, likely on Monday. Timing remains somewhat fluid, in context of still evolving circumstances; check here for any updates. IMPORTANT: Subscribers always are advised directly, by coincident e-mail, whenever a Commentary is posted, along with a direct link to the posted Commentary and their needed login details.

POSTINGS OF PENDING ECONOMIC NUMBERS AND DEVELOPMENTS: Census Bureau will publish the February 2022 Housing Starts on March 17th (8:30 a.m. ET). Later on the 17th (9:15 a.m. ET), the Federal Reserve will report on February 2022 Industrial Production. Details of Economic, FOMC news, etc. usually posts in this DAILY UPDATE by late day on the day of release, most frequently within several hours of the final of the event, unless otherwise indicated here.

• ARCHIVES - VIEWING EARLIER COMMENTARIES. ShadowStats postings of June 2021 Commentary and before - back to 2004 - are open to all, accessible by clicking on “Archives,” at the bottom of the left-hand column of this ShadowStats homepage.

• ALTERNATE DATA TAB [See the Menu Bar above] provides the latest headline numbers and exclusive ShadowStats Alternate Estimates and related Graphs of CPI Inflation [updated Mar 10], GDP [Feb 24], Unemployment [Mar 4], Money Supply [Feb 22] and the ShadowStats Financial-Weighted U.S. Dollar [Feb 3]. Data downloads and the Inflation Calculator are Subscriber only.

-- John Williams