Weekly Indicators for March 30 - April 3 at Seeking Alpha

 

 - by New Deal democrat

My “Weekly Indicators” post is up at Seeking Alpha.

After zigging upward last week, interest rates zagged downward - but not as much - this week, enough to change the ratings on some interest rate sensitive indicators, like mortgages. And consumers continue to spend, despite all the shocks and sluggishness in things like the labor market in the past 15 months.

As usual, clicking over and reading will bring you up to the virtual moment as to the state of the economy, and give me a little extra jingle in my pocket next time I go to the local bookstore.

March jobs report: the birds that came home to roost play an April Fool’s joke, shrieking “Nevermind!”

 

 - by New Deal democrat

I described two months ago as “the month the birds came home to roost.” Last month, pace Edgar Allen Poe, I said the birds were screeching “recession!”

This month, Poe’s birds decided to play with us, screeching instead: “Nevermind!”

This was a good report with mainly good internals, with one large exception.

Below is my in depth synopsis.

HEADLINES:

• 178,000 jobs gained, the biggest number since December 2024. Private sector jobs increased 186,000, while government jobs declined -8,000. The three month average rose from a puny +6,000 to +68,000.
• The pattern of downward revisions to previous months did continue. While January was revised upward by +34,000, February was revised downward by -41,000, for a net decline of -7,000. 
• The alternate, and more volatile measure in the household report, declined by -64,000 jobs. On a YoY basis, this series DECLINED for the second month in a row, by -561,000 jobs, or an average of -47,000 monthly.
• The U3 unemployment rate fell -0.1% to 4.3%. 
• The U6 underemployment rate rose +0.1% to 8.0%.
• Further out on the spectrum, those who are not in the labor force but want a job now rose by +66,000.

Leading employment indicators of a slowdown or recession

These are leading sectors for the economy overall, and help us gauge how much the post-pandemic employment boom is shading towards a downturn. These were mainly positive:

• The average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, fell -0.1 hour to 41.4hours, but still is now down only -0.2 hour from its 2021 peak of 41.6 hours.

• Manufacturing jobs rose +15,000, only the second increase in the last 12 months.
• Truck driving declined another -800.
• Construction jobs rose +26,000.
• Residential construction jobs, which are even more leading, rose +3,100, continuing the trend of stabilizing since last April.
• Goods producing jobs as a whole rose +43,000.. 

• Temporary jobs, which have declined by over -650,000 since late 2022, declined again this month, by -4,400, but remained above their post-pandemic low set last October.
• The number of people unemployed for 5 weeks or fewer declined -181,000.

Wages of non-managerial workers 

• Average Hourly Earnings for Production and Nonsupervisory Personnel increased $.05, or +0.2%, to $32.07, for a YoY gain of +3.4%, its lowest YoY% gain since the pandemic. While this remains higher than the YoY inflation rate through February, even that is among the lowest gains in the past three years — and it is very much likely to change once March’s CPI is reported.

Aggregate hours and wages: 

• The index of aggregate hours worked for non-managerial workers increased +0.2%, and is up only 0.7% YoY, below average for the past two years.

• The index of aggregate payrolls for non-managerial workers rose 0.3%, and is up 4.1% YoY, close to its post-pandemic low of 4.0% set last June.

Other significant data:

• Professional and business employment (for a change!) rose +2,000. These tend to be well-paying jobs. This remains above its October low, it remains lower YoY by -0.4%, which in the past 80+ years - until now - has almost *always* meant recession.
• The employment population ratio declined -0.1% to 59.2%, vs. 61.1% in February 2020, and its lowest since October 2020.
• The Labor Force Participation Rate declined -0.1% to 61.9% , vs. 63.4% in February 2020, and its lowest since November 2020.

SUMMARY

As I wrote at the opening above, this was a good report, but with a few significant negatives. 

Let’s start with the good, which obviously include both the headline number and the decline in the unemployment rate and short term unemployed, as has been telegraphed by extremely low initial jobless claims. Goods producing jobs increased, including manufacturing, construction, and residential construction jobs. Professional and business jobs had a positive month, for a change. 

There were some negatives, including a decline in the manufacturing work week, EPOP and LFPR. Truck driving jobs continued to decline. And the underemployment rate rose slightly. 

But the most significant negatives had to do with wages. The increase in hourly nonsupervisory wages was among the lowest since the pandemic, and the YoY% change was the lowest. Aggregate hours for nonsupervisory also had a relatively small gain. Which means that, even nominally, the gain in aggregate nonsupervisory payrolls was close to its post-pandemic low. Consumer prices last March were unchanged. If the Cleveland Fed’s estimate of a 0.8% gain this March is accurate, that will mean March CPI will come in a 3.2% YoY. The estimated *real* gain in YoY nonsupervisory payrolls would only be 0.9%, the lowest since the pandemic, and a major cause for concern.

So it is very possible that this rosy-looking outlook could change by the end of next week, but for today the birds that came home to roost have played an April Fool’s joke: “Nevermind!”

Jobless claims continue near historic lows; I expect the unemployment rate to decline

 - by New Deal democrat

 With the stock market flailing around trying to keep its head above water, jobless claims along with consumer spending are the only two metrics that solidly support a continued economic expansion (ok, maybe ISM manufacturing is trending in that way as well).

But to the point of this post: last week initial jobless claims declined -9.000 to 202,000 — again, near historic 50+ year lows. The four week moving average declilned -3,000 to 207,750. Meanwhile, with the typical one week delay, continuing claims rose 25,000 to 1.841 million, still significantly below the 1.900+ we were seeing for most of last year:

[NOTE: For some reason FRED has not gotten around to posting these this morning, so here is the equivalent graph from TradingEconomics.com]:

As per usual, the YoY% changes are more important for forecasting purposes. So measured, initial claims were lower by -9.4%, the four week average down -6.8%, and continuing claims down -1.9% [Since TradingEconomics doesn’t have the YoY comparisons, you’ll have to imagine this until FRED gets around to it].

These are very good comparisons. While most of the data has been very weak, it is just very hard to imagine an economic downturn occurring with for all intents and purposes no layoffs.

Finally, since tomorrow is jobs day, and jobless claims lead the unemployment rate, here is our final look for the month. First, here are the 4 week average of initial claims (blue) vs. the unemployment rate (noisier but more leading):

And here are continuing claims (blue) vs. the unemployment rate (much less noisy albeit less leading):

I expect the unemployment rate to decline, or at very least not increase tomorrow. We’ll see then.

March ISM manufacturing shows expansion, but at an inflationary price

 

 - by New Deal democrat

While much of the official government data is still delayed, months after the end of the shutdown, privately sourced data remains fully up to date.

And March data started out with the ISM manufacturing index, which was our second piece of (mainly) good news of the morning.

The headline ISM number (blue in the graph below) rose 0.3 to 52.7 (recall that any number above 50.0 indicates expansion). The more leading new orders subindex (gray) did decline 2.3 from 55.8 to 53.5, but obviously that is also still positive. The three month averages, which smooth out a little volatility, improved to 52.6 and 55.5:

One of the surprises since last autumn has been the rebound in manufacturing despite the tariff situation, even though much of it is likely due to AI data center construction. 

Goods production is only about 25% of the US economy, so normally I weight it against the comparable services numbers, but this month there is really no need, since services have been above 50, indicating expansion, consistently since late last summer.

The bottom line is, this number suggests continuing expansion in the next few months - although I feel compelled to add that I doubt much of the impact of higher fuel costs and associated interruptions from the Iran war debacle has made it through into the index numbers yet.

Several other components of the index are worth noting this month as well.

First, the “less bad” trend in employment continued in March, as it declined very slightly, -0.1, to 48.8. But all three months so far this year have been significantly better than the dismal readings that began last February:

There was one important negative in the report, however - prices paid. These shot up to 78.3, the highest number since June of 2022:

This continues the sharp inflationary pulse that started in February. 

So, while the ISM manufacturing index indicates expansion, it is an inflationary expansion, which is going to put continued upward pressure on interest rates, and tend to keep the Fed on the sidelines in terms of any hope of further rate cuts in the immediate future.

Some good news for a change: real retail sales rebounded in Febuary

 

 - by New Deal democrat

After all these months, we are still feeling the effects of the government shutdown last fall.  Normally construction spending is released on the first day of the month for the second previous month - in today’s case, that would be for February. But half a year after the shutdown began, February and March construction spending are both scheduled to be released on May 7. As I’ve said a number of times already, this is simply not the way a first world country should operate.

But in today’s case, we at least get a consolation prize in the form of retail sales, one of my favorite broad-economy indicators, for February - about three weeks later than normally scheduled. And for a change compared with most recent data, it was good news.

Nominally, retail sales rose 0.6% in February. After taking the monthly 0.3% increase in consumer prices into account, real sales up 0.3%. The below graph also shows the similar but more comprehensive measure of real personal spending on goods (gold, right scale):

Even so, real retail sales remain -0.4% below their peak last August, and indeed below most of their levels from last year. Further, if you believe, as I do, that the shutdown shelter kludge removed about 0.2% from consumer inflation during the September-November period, then the comparison becomes similarly worse. 

February’s good number also means that on a YoY% basis, after a one month flirtation with trending negative, real retail sales have rebounded to +1.3%:

Since consumption leads employment, this is also good news for the latter in the next few months, after deteriorating through most of 2025. Here is the update of YoY real sales and real personal spending on goods (/2 for scale) together with employment (red):

But most likely the deterioration in spending last year has not been fully absorbed by employment yet. This morning ADP reported that private payrolls only grew by 18,000 in March. We’ll find out on Friday if a similarly poor number is true in the official jobs report.

February JOLTS report confirms low hire, low fire, low quit economy

 

 - by New Deal democrat

I normally don’t pay too much attention to the JOLTS report, and I won’t this month, either. It does break down the labor market further than the jobs report, and it does have several slightly leading components, so let’s at least take a brief look.

Below are job openings (blue), hires (red), and quits (gold) through February, all normed to 100 as of the onset of the pandemic:

Job openings seem to get the lion’s share of attention from most commentators, but I treat them as somewhat fictional. In any event, they came in at the 2nd lowest reading since the pandemic, although last month was revised significantly higher. But both actual hires and quits had their absolute lowest reading since the pandemic, and since they unlike openings are “hard” data, that is further confirmation of the poor monthly nonfarm payrolls we’ve been seeing.

Layoffs and discharges, on the other hand, remained near their lowest numbers of the past 12 months, although they did increase in January:

This is further confirmation of the extremely low level of new jobless claims we have seen since November, although as I have pointed out in the past, jobless claims are more leading and less noisy than these monthly layoff numbers.

Finally, the quits rate (blue) tends to lead the YoY gain in hourly nonsupervisory wages (red). First, here’s the long term historical graph:

And here is the post-pandemic close-up:

With quits falling to a new post-pandemic low, this suggests that wage gains will also be somewhat more attenuated in the next few months — not something we want to see while there is an oil shock-induced spike in inflation.

FHFA and Case Shiller repeat sales indexes continue to show further disinflation

 

 - by New Deal democrat

The two national repeat home sales indexes, from the FHFA and Case-Shiller, were reported this morning and both continued to confirm the gradual abatement in shelter inflation.

The Case-Shiller National index (blue in the graphs below) up 0.2% for the three month period ending in January, while the FHFA index (red) rose 0.1%:

But probably more important is that the YoY comparisons continued to show further disinflation, with the FHFA Index up 1.6% YoY, the lowest YoY% increase since spring of 2012, and the Case Shiller national index only up 0.9% YoY, the lowest since the Great Recession’s housing bust except for March through June 2023:

As per usual, since housing prices lead the CPI’s shelter component by roughly 12-18 months, let’s compare the YoY trends (Note: house prices lead indexes /2.5 for scale):

This is solid evidence that we can expect shelter inflation in the CPI to continue to decelerate throughout this year; if anything, the mortgage rate increases associated with the Iran war are only likely to intensify that, with the shelter component ending this year at close to a 2.0% YoY increase.

Oil shocks and real aggregate nonsupervisory payrolls

 

 - by New Deal democrat

As readers know well, one of my favorite “real life” indicators is real aggregate nonsupervisory payrolls, which measures how much in wages average American workers have to spend each month. When it is growing, economic expansions almost always continue; when it declines by any significant amount, recessions almost always ensue shortly.

With gas prices going from $3 to $4 a gallon in March, how is it likely to be impacted? Let’s take a look at a current estimate as well as some history.

Although I’ve done my own K.I.S.S. estimate, the folks at the Cleveland Fed take a much more detailed approach, and publish nowcasts monthly. As of last Friday, they were estimating that March headline CPI would increase 0.8%:

Although Friday is a religious holiday, and markets will be closed, the jobs report for March is scheduled to be released as usual. Although we obviously don’t have the actual figure yet, what we can say is that for the last three years, nominally aggregate payrolls have increased an average of a little under 0.4%; for the year 2025, it slowed to 0.3%:

In other words, if payrolls increased in March by the same percent they have averaged over the past year, real aggregate payrolls are likely to decline about -0.5%. As the below graph, which norms real aggregate payrolls to their peak in January, shows, that would take us back down to just above August and September levels, since February already saw a decline of -0.2%:

Per my previous analysis, that wouldn’t necessarily be enough to flag recession on its own, but it would be in the ballpark of the average such decline until the onset of recessions — and remember that the shelter kludge of CPI during fall’s shutdown suggests that CPI should have been about 0.2% higher, meaning that in *real* real terms average Americans might have a little less to spend than they did last summer.

Is that supported by the historical data? Well, let’s take a look at what has happened to real aggregate nonsupervisory payrolls in past oil shocks. Note that because the official gas price data didn’t begin until late 1991, I’m using spot oil prices for West Texas crude oil (/10 for scale) in the below graphs.

In the 1974 oil embargo, in January oil prices increased 125% from $4 to $10 a barrel (blue). Real payrolls (red) declined -1.1%:

In the second OPEC oil shock of 1979, in August oil prices increased 21.8% from $21.80/barrel to $26.50. Real payrolls declined -0.3%:

OPEC’s pricing power collapsed in 1986, but with Iraq’s invasion of Kuwait in August 1990, oil prices increased 45.8% from $18.60/barrel to $27.20. Real payrolls declined -0.5%:

The final graph below covers 3 separate events. Gas prices bottomed at the end of 1998. In March 1999, oil prices rose 22.1% from $12/gallon to $14.70. Although not shown, gas prices rose 19.3% from $0.90/gallon to $1.08. Real aggregate payrolls declined -0.3%.

When Katrina hit at the end of August 2005, over the two month period till the end of September, oil prices increased 10.7% from $58.70/barrel to $65,00. Gas prices rose from $2.29/gallon to $2.80. Real aggregate payrolls declined -0.3% in August and another -0.8% in September.

Finally, oil prices rose in March 2009 from their Great Recession bottom by 22.5% from $39.20/barrel to $48.00. Gas prices rose 7.2% from $1.91/gallon to $2.44 by the end of April. Real aggregate payrolls declined -0.9%:

This month oil prices started out at about $64.50/barrel. They are likely to end the month at about $100, a 55% increase. Gas prices are likely to be higher by about 35%.  This is about equivalent to the Kuwait invasion oil shock, and second only to the 1974 embargo. In the former, real aggregate payrolls declined -0.5%, and in the latter -1.1%. So the estimation of -0.5% in real aggregate payrolls based on the Cleveland Fed’s nowcast for March headline inflation appears likely, and if anything somewhat conservative.

Weekly Indicators for March 23 - 27 at Seeking Alpha

 

 - by New Deal democrat

My “Weekly Indicators” post is up at Seeking Alpha.

Unsurprisingly, the main issue is the spreading disruption from the spike in oil prices as well as the bond market’s selloff due to heightened inflation concerns. As I wrote here yesterday, the latest victim is housing, which is being strangled by increased mortgage rates.

As usual, clicking over and reading will bring you up to date on the incipient carnage, and reward me a little bit for gathering and collating the information for you.

“Trump take housing:” how the Iran war is killing the housing sector’s “green shoots”

 

 - by New Deal democrat

“Trump take egg” was a social media meme popularized by MTSW at Bluesky, highlighting prices that T—-p had promised would come down, but increased instead.

The spike in egg prices was due to avian flu, but when it comes to internet memes, nevermind.

Which is by way of introduction to saying that the economic damage done by the Iran war is spreading out.

At the end of February, mortgage rates hit a 3.5 year low at 5.98%. As of yesterday, according to Mortgage News Daily, they made a new 7 month high at 6.62%.

 

I have been writing for nearly a year that the housing market was recessionary, and that the last dominos were falling. But recessions do end and turn into recoveries, and in the last few months there have been signs of “green shoots” in things like mortgage applications that suggested that left to its own devices, any such recession would likely be short. Well, the Iran war is in the process of killing those green shoots.

First, let’s take a look at 10 and 30 year Treasury interest rates (dark and light blue, right scale) vs. mortgage rates (red, left scale) since the Fed first started raising rates 4 years ago:

Note that in the first year, mortgage rates reacted more strongly to the change in the interest rate climate than did long term Treasurys. In the past two years, they gave back that premium, as mortgage rates declined from a high of about 7.80% to the aforementioned 5.98%. Now here is the short term look to emphasize the reversal in the past 4 weeks:

Note that the mortgage rate in the above graph is weekly, and does not include the further increase in the last few days, which would take us all the way back to last August.

And the increase in mortgage rates has already had an effect on new purchase mortgage applications (blue, left scale) in the graphs below) as well as refinancing (gray, right scale). Here’s the longer term look, showing how that after almost completely drying up in 2023-24, mortgage applications generally rose during 2025 and into this year, in response to lower mortgage interest rates:

Now here is the close-up of the past year:

Note that both types of applications fell sharply in the past several weeks - and the two graphs above end as of one week ago.

Refinancing is particularly sensitive to mortgage rates. As the below graph shows, it is virtually a mirror image:

Again, this graph does not include the further increase in mortgage rates this week.

As a result, we can expect both purchase and refinancing mortgage rates to decline further. This is almost certainly going to put an end to the “green shoots” that were beginning to appear in the housing data. And if those higher rates persist, if there is a recession this year, it is only going to be made deeper and longer.

New and continuing jobless claims remain near historic lows

 

 - by New Deal democrat

Along with the weekly update of retail sals, new jobless claims continue to be the most positive economic data in the entire specturm.

Last week new cliams increased 5,000 to 210,000, which is about average for the entire post-pandemic period. The only other time they were this low was 2018-19, and before that, the 1960s! The four week moving average declined -250 to 210,500. With the typical one week delay, continuing claims declined -32,000 to 1.819 million, the lowest number since June 2024:

On the YoY basis more important for forecasting purposes, initial claims were down -6.2%, the four week average down -5.9%, and continuing claims down 1.8%:

This week let me include the long term historical look at how initial claims lead the *number* of unemployed (red in the graph below), and to a much lesser extent, so do continuing + initial claims:

The same is true with respect to the unemployment rate:

With the significant drop in new and now continuing jobless claims since last November, the forecast is very much that the number of unemployed in the next several jobs reports is likely to decline:

Note that the number of unemployed peaked in September and November. Jobless claims forecast that this number will remain below those peak months.

And the same is true of the unemployment rate, even though it ticked up in the last jobs report:

The unemployment rate is likely to tick down to 4.2% or even 4.1%. The only complicating factor is whether the number of *employed*, as well as the number of unemployed, also declines.

I continue to suspect that, not only is there residual post-pandemic seasonality in the jobless claims numbers, but that the drying up of immigration as well as the ramping up of deportations in the past year has had a great deal to do with both the stalling of employment as well as the relative persistence of the unemployment rate.

Updating the K.I.S.S. estimate of the coming shock in CPI

 

 - by New Deal democrat

There’s no big economic data today, so let me update something I posted last week, in which I warned readers to expect a shock in the next CPI report. 

I wrote that “based on past history and using conservative assumptions, the model forecasts a 1.8% increase in CPI between March and April. Using normal assumptions it would forecast a 2.1% increase in these two months. And if I were to plug in today’s $3.92/gallon average vs. $3.72, the model would forecast a 2.5% increase in consumer prices by the end of April.”

Well, as of today’s weekly update from the E.I.A., gas prices as of the 20th were $3.96/gallon:

That would translate to an increase of 2.6% in consumer prices using my K.I.S.S. method of estimating the ballpark increase.

And according to GasBuddy, as of today, gas prices are right at $3.99:

which would translate into a 2.8% increase.

There is no way on earth wages would be able to keep up with that kind of shock.

The bond market sends an unprecedented message

 

 - by New Deal democrat

Something not just unusual, but unprecedented has happened in the bond market this year.

Normally, when an inverted yield curve (where earlier maturing bonds yield more than later maturing ones) regularizes, or un-inverts (where yields get higher the later the maturing), it is because the Fed has lowered rates sufficiently that all maturities, from 3 months to 30 years, follow them downward, but the shorter maturities decline in yield more.

An excellent example of this is the Fed easing on the cusp of the Great Recession. In January 2007, the yield curve was almost totally inverted (dark line). Maturities out through 10 years were not just lower than the Fed funds rate, but each longer maturing bond earned less than shorter maturing ones. The only exception was the thinly traded 20 year maturing. Even the 30 year bond yielded less than the Fed funds rate. As the Fed smelled increasing trouble, it made a series of rate cuts, and by March 2008 (the lighter shaded line) the curve had completely normalized, with shorter dated maturities declining in yield far more than longer dated ones:

But that’s not what has happened this year. The dark line in the below graph is the yield curve from December, while the lighter line is from the end of last week:

In December the yield curve was still inverted out through the 2 year maturity. By last week the yield curve had normalized, but not because earlier maturing bonds had declined in yeild, but rather because short to medium term yields had *increased* in yield, with yields from 3 months to 2 years progressively rising more.

I’ll spare you all the graphs I generated to test whether this year’s configuration was truly unique, but below are three of them. In all three, shorter maturing yeilds are lighter in color than longer maturing yields. (Note: these are not *all* maturities, but are representative. But be assured that I looked at every single maturity from 1 month to 30 years available on FRED, as far back as each series went).

First, here is the period of disinflation that started in 1982 and continued until the pandemic:

Each time following an inversion, the shortest dated yields fell the most, followed by more intermediate term yields, while the longer maturing yields declined only gradually.

But what about the inflationary 1960s and 1970s? Here is the first part of that era:

And here is the second part:

Again, in each case of an inverted yield curve (where the lighter colored matirties were higher in yield than the darker ones), *all* of the maturities declined in yield as the curve normalized, even though as time went on even the earliest maturities yielded more than they had before. 

The closest analog to the present situtation I could find was the end of 1981, when the curve normalized as most yields stayed roughly the same as the (temporary) bottom in yields was imminent:

So the present situation in the bond market is one of a kind.

This unique event has probably happened because bond traders no longer expect further rate cuts, or at best they expect only one of them. Rather, traders likely expect at least some inflationary impulse over the next several years that mean that short term maturities must offer more yield to be competitive. Normally this has happened in an environment of an overheated economy which is gathering inflationary steam; as opposed to the current situation where for the past year about the only sector of the economy experiencing anything more than tepid growth has been related to the building of AI data centers.

This time around the inflationary expectations appear to all to be downstream of decisions in Washington which have been likely to shift both the supply and demand curves towards more inflation, including tariffs and the War with Iran resulting in the closure of the Strait of Hormuz (supply shocks) as well as a Federal budget that is most comparable to a Mafia bust-out (demand shock).

We live in interesting times.

Construction spending in January declined, manufacturing construction tanked; but the AI data center Boom continued

 

 - by New Deal democrat

This morning the construction spending report for January was released (note that this is still about 3 weeks later than usual, so last autumn’s government shutdown continues to reverberate in the data). In the past I have used it to help track the long leading sector of housing, but in the wake of the Inflation Reduction Act, plus the chaos now in Washington, it has also been useful to track manufacturing. And finally, via private construction of water supply, as a proxy for construction of AI data centers.

And with the exception of that last item, the numbers in January, even nominally, were all negative. Total construction spending declined -0.3%, residential spending down -0.8%, and manufacturing spending down -2.0%. Non residential spending as a whole declined -0.4%. But spending on water supplies increased a sharp 3.3%. Below are all of the above, normed to 100 as of one year before (January 2025). I also show the PPI for construction materials to show how much spending there was for each in “real” terms:

Since the cost of construction materials (red) increased 6.6% during the 12 month period, only spending on (likely AI data center related) water supply increased in real terms.

Here is the same data measured YoY:

Note that almost every sector of construction has either slowed down or turned negative in the past year, and in particular manufacturing construction has declined sharply. Only residential construction has rebounded slightly on a nominal basis, and in real terms bottomed last spring. In contrast, the Boom in water supply construction is apparent. Notably, as shown in the graph below, even spending on water supply construction in real terms has declined since last September:

Most importantly, this paints a picture of spending in the two leading sectors - housing and manufacturing - declining through 2025. 

This is yet more evidence that the only sector which has been keeping the economy out of recession recently has been that releated to AI data centers.

American political (and military) support for Israel appears to be on borrowed time - maybe 10 years

 

 - by New Deal democrat

Occasionally on Sundays I have posted on things other than the economy. Some dramatic poll results I saw this past week called out for such a post.

A popular poster over at Bluesky named Micah posted what comes pretty close to my overall view of the 2024 Presidential campaign:

My theory of the Harris campaign, which makes exactly nobody happy: 1. she was put in an incredibly deep and arguably insurmountable hole by Biden 2. she made significant errors, largely in not separating herself from him enough 3. her results were still in the upper range of plausible outcome

Every incumbent party on the planet got walloped and Harris/Dems did better than almost all of them She overperformed in swing states where she campaigned heavily compared to the rest of the country She absolutely could have run a better campaign (Gaza!) I don’t know if it would have been enough

Given what she was handed, I think Harris ran as close to a perfect campaign as could have been reasonably expected.

But what I wanted to focus on in this post is his mention of her position on Gaza, which was to embrace Biden’s position of unwavering support for Israel.

I’m not sure if supporting the civilian population of Gaza would have on net gained her votes, because there is a significant bloc in the Democratic Party which would refuse to vote for anything short of complete support for Israel.

But whether or not that was true in 2024, the below poll results from Gallup published several weeks ago strongly indicates that US support for Israel is on borrowed time.

The headline result was that, for the first time, more respondents sympathized with Palestinians than supported Israelis, by 41%-38%:

But that isn’t the biggest result. Rather, it is the breakdown of support by *age* that is most breathtaking.

Americans over 55, most of whom remember the 1974 Yom Kippur War, and many who remember the 1967 War, continue to support Israel by a large margin, 49%-31%:

But middle-aged Americans, ages 35-54, now decisively sympathize with Palestinians, by 46%-28%:

And the most shocking result of all, Americans adults younger than 35 sympathize with Palestinians by a decisive 53%-23%:

Unsurprisingly, a similar survey from a year ago found that the deterioration in sympathy towards Israel was across the political spectrum, but most dramatic among Democrats. Negative views towards Israel among GOP supporters rose from 27% to 37%, but among Democrats it rose from a slim majority of 53% to a decisive one of 69%. In both cases younger adults (below age 50) ended with majority antipathy towards Israel, 50% among GOP leaners and 71% among Democrats:

Usually, basic political attitudes are formed while a person is very young, and are maintained throughout adulthood. Not only do the above polls show that attitudes have been shifting against Israel even among older age groups, but that a solid majority of younger Americans no longer support it politically. Under the theory that “progress will be made, one funeral at a time,” it seems likely that support for Israel will become toxic across all the political spectrum except for some hard core GOPers within 10 years. The only mitigating factor, as for as Israel is concerned, is that power in Washington is concentrated towards a Gerontacracy, but even so, unless there is a complete reversal of trend, how much longer can Israel hold on to American political - and even more importantly, military and diplomatic - support? And without such support, what is its future then?