With initial claims worse than forecast, with an increase to 414,000 initial applications, with the 4 week moving average rising as well, though continuing claims fell slightly.
When you look at this, and a weak Beige Book from the Fed, and the fact that there were absolutely no jobs created in August, the idea that we are in any sort of recovery is laughable.
We’re in a deflationary spiral, and the already inadequate stimulus has been on the down slope for over 6 months, and somehow or other people believe that the austerity fairy will solve things, when it’s actually going to make it worse.
You are absolutely correct, this is indeed the dreaded deflationary spiral, when it comes to wages and personal wealth. Unfortunately, the inflation genie is also emerging, with energy and food reaching new highs with the devaluation of the currencies.
This does not follow standard (flawed) economic models. We are in for a very rough ride for the next few years.
I would argue that this is a fairly classic Keynsian scenario, with the addition of excessive rent taking (speculation in food and commodities) causing price increases in those areas.