Job losses are starting to pick up in the Tech sector on par with 2020 lay offs. The inflation eye of the storm is about to pass and stagflation still looks likely for 2023. As energy markets begin to tighten once again.

Chart 1

Chart 2

Chart 3

The stagflation storm is picking up in 2023, with the eye about to pass which was the massive amount of oil dumped into the global economy by President Biden's Strategic Petroleum Release program which started in March 2022.  The energy inflation reprieve that occurred tail end of 2022 was the precursor of a drop in inflation, not so much global interest rates, which are still below any significant rate that would have an impact on inflation.   

Chart 1 shows the Federal Reserve's interest rate at 4.50% (orange) line and the white line the consumer price index which has fallen from 7% to 6.1% within the last quarter of 2023.  Also note Personal consumption expenditures and U.S. import prices are persistent high, meaning:  costs of living has not dramatically come down.  U.S. interest rates should be over 5% by now, with Wall Street and the commercial banks screaming for a pause in rates and/or worst encouragement for the Fed to cut this year.    The markets pricing in a recession and pricing out stagflation on a month to month basis, is creating a vortex of on again off again speculation.   This can be seen in the Crypto markets.

The bellwether sign for stagflation is of course job losses.  Chart 2 is actually quite frightening.   As you can see U.S. unemployment rate (white line) is at 20 year lows, from 14% when COVID-19 swept the world in 2020, falling like a brick when economies all began to reopen and consumption roared back to life.   Supply chains eased and factories began producing in lieu of future sales.   The orange line is the Federal Reserve Balance sheet at 8.5 Trillion, which you do not have to be an economic boffin to work out that over Eight Trillion of U.S. dollars is still floating around the economy.  Both supporting companies who are still borrowing heavily and contributing to inflation.     

Yet, the tech sector has become the epicenter job cuts, please refer to Chart 3 from layoffs.fyi, which shows the the rising job losses of the tech sector since COVID-19.  Note, layoffs are nearly on par with the 2020 rate.