“Many political consultants and many White Houses have an exaggerated view of the extent to which messaging can counteract reality. But if you look at what’s dominating people’s minds right now, it’s inflation. Survey after survey confirms that. And inflation is very much a product of direct experience and especially repeated direct experience.”

— Former Clinton White House official Bill Galston, quoted by Politico.

“Seven months before he faces a critical test from voters in the midterm elections, President Joe Biden is turning his focus to kitchen-table issues as he struggles to get credit for a recovering economy,” the AP reports.

“Since Biden took office last year, job growth has been vigorous and steady — as he told the country Friday after the March jobs report showed the addition of 431,000 jobs and the unemployment rate falling to a low 3.6%. But those same remarks were also tempered by his recognition that food and gas prices are too high and inflation is at its worst level in a generation.”

“For Biden, convincing Americans of the progress made in the economic recovery only serves as a salient reminder of how much further the country has to go.”

“Compensation for U.S. chief executives has rebounded as the pandemic recedes, putting it on pace to set a record amid a tight labor market that is also driving pay higher for many of their workers,” the Wall Street Journal reports.

Politico: “The U.S. unemployment rate hit 3.6 percent today, as 431,000 jobs were added during the month of March. It’s the type of data point that should make a White House giddy. And yet, one can’t help but smell the whiff of frustration emanating from 1600 Pennsylvania Avenue.”

“There is a remarkable disconnect among the American public involving the reality of the jobs market and the perception of it. A little-noticed survey by Navigator Research last month showed that 37 percent of the public thought that more jobs had been lost (yes, lost) over the last year while just 28 percent thought that they had been gained. That was particularly pronounced among Republicans, 47 percent of whom believed jobs had been lost over the last 12 months.”

“Needless to say, that’s wildly inaccurate: The unemployment rate was 6.4 percent when Joe Biden took office… That these basic facts aren’t translating to the public says a lot about how news is disseminated and consumed.”

“Workers at Amazon’s massive warehouse on Staten Island voted by a wide margin to form a union, in a stunning win for a campaign targeting the country’s second-largest employer and one of the biggest victories for organized labor in a generation,” the New York Times reports.

“No union victory is bigger than the first win in the United States at Amazon, which many union leaders regard as an existential threat to labor standards across the economy because it touches so many industries and frequently dominates them.”

“U.S. job growth continued at a robust pace in March while the unemployment rate fell, signs the labor market is booming as the Covid-19 pandemic recedes and more workers return to the labor force,” the Wall Street Journal reports.

“Employers added 431,000 jobs in March, and the jobless rate fell to 3.6% from 3.8% a month earlier… The report marked the 11th straight month of job gains above 400,000, the longest such stretch of growth in records dating back to 1939.”

Aaron Blake: “Evidence now suggests the narrative is coming up well short. Domestic pricing concerns are far outpacing Ukraine on Americans’ list of priorities, and Biden’s poll numbers on his handling of the economy continue to hit new lows. Whatever stomach Americans had for higher prices to support the war in Ukraine, it doesn’t appear particularly strong.”

U.S. home prices shows signs of becoming “unhinged from fundamentals” like they did in the housing bubble that preceded the 2008 crash, Bloomberg reports.

The Dallas Fed has a post on this that is worth reading.

“An inflation gauge that is closely monitored by the Federal Reserve jumped 6.4% in February compared with a year ago, with sharply higher prices for food, gasoline and other necessities squeezing Americans’ finances,” the AP reports.

Inflation will mean the average U.S. household has to spend an extra $5,200 this year ($433 per month) compared to last year for the same consumption basket, according estimates by Bloomberg Economics.

Financial Times: “Two-year Treasury note yields rose above those of the 10-year for the first time since August 2019, inverting a portion of the yield curve monitored closely by Wall Street and policymakers. Inversions typically signal malaise about the economy’s long-term growth prospects and have preceded every US recession in the past 50 years.”

“Typically, a recession has followed in the two years after an inversion of this measure of the yield curve.”

A new Gallup poll finds Americans are more worried about inflation than at any point since 1985, and that concern is quickly escalating.

New York Times: “Inflation stress divided slightly among income groups — 63% of adults earning $40,000 or more were very concerned, compared with 58% of those earning $100,000 or more — and starkly along political lines. About 79% of Republicans were seriously worried about inflation, versus 35% of Democrats.”

“Signs are emerging that the resilience of American consumers is rapidly waning, potentially undermining one of the few remaining pillars supporting the bull market in equities,” Bloomberg reports.

“U.S. households have until recently mostly absorbed higher prices on everything from coffee to chicken to clothes, helping companies maintain fat profit margins despite higher input. But that doesn’t mean consumers were happy about paying more for the same goods, which is why the University of Michigan’s sentiment index has steadily deteriorated to the lowest since 2011.”

“Global supply strains that started to ease in early 2022 are worsening again as headwinds strengthen from the war in Ukraine and China’s Covid lockdowns, threatening slower growth and faster inflation across the global economy,” Bloomberg reports.

New York Times: “In a world contending with no end of economic troubles, a fresh source of concern now looms: the prospect of a confrontation between union dockworkers and their employers at some of the most critical ports on earth.”

Axios: “At least 22 governors have proposed cutting or suspending gas taxes, seven states are considering measures to alleviate food costs, and about a dozen are maneuvering to reduce income taxes.”

“States are flush with cash after reaping a windfall from the federal government in the early going of the pandemic, when federal stimulus dollars were flowing. So they’ve got some money to spend.”

New York Times: “The Fed has at times managed to raise interest rates to cool down demand and weaken inflation without meaningfully harming the economy — Mr. Powell highlighted examples in 1965, 1984 and 1994. But those instances came amid much lower inflation, and without the ongoing shocks of a global pandemic and a war in Ukraine.”

“The part Fed officials avoid saying out loud is that the central bank’s tools work by slowing down the economy, and weakening growth always comes with a risk of overdoing it. And while the Fed ushered in its first rate increase this month, some economists — and at least one Fed official — think the central bank was too slow to start taking its foot off the gas. Some warn that the delay increases the chance it might have to overcorrect as a result.”