Tag: Misery Index

March 2025 Wrap-Up

Another Month Passes By

March 2025 contained a variety of weather from balmy to frigid. Moisture was on the light side, but the last few days look promising for April showers. Travel, gardening and quilting took up quite a bit of time. Books were read and reviewed. All in all, it was a productive month.

On the economic front, tariffs are eminent, and the outcome is uncertain. Naturally this translates into an unsettled market. Young stock market participants need not panic but I am sure retirees and fixed income individuals are as jittery as the stock exchanges. I have added a New Market Basket to track how the coming tariffs will impact prices. The Misery Index fell slightly to 6.9%. This is opposite of what I expect going forward.

Politics in the United States continues to be acrimonious. Our united front after 9/11 is all but gone. There is plenty of blame to go around and none of it is helpful. Personally, I only know of a few people planning to locate outside of the country. But others may be entertaining the thought of moving abroad. The parallels to the 1930s and 1940s have the elderly population shaking their heads.

In the Library-March 2025

While only two books were reviewed, several more were read. Some will be reviewed in the coming weeks. Deciding what to review is easy for the most part. I try not to have too many of the same author. I also refuse to review those I did not enjoy and, in some cases, don’t even finish. Furthermore, I often read for fun. Those books tend not to get reviewed. However, the next review will be an exception. Check back in a few days.

Starting Seeds

Seedlings planted in trays March 2025March is a good time to start seeds. So, the cool-weather crops were started in early March 2025 while the tomatoes were planted toward the end of the month. Lettuce, kale, spinach and Swiss chard make up most of the plants. Six different tomato varieties were planted. The Genuine Heirloom Marriage Hybrid tomatoes took longer to emerge, and the germination rate was about half. But the seeds were from 2023. Viability decreases over time.

Additionally, repairs were made to the raised rows in the Big Garden. Early March brought tropical storm and even Cat. One winds to the Great Plains. Dust storms still exist in this part of the country in the early spring. Fortunately, by the end of the month the wheat stands turned green and helped mitigate the dirt-filled air. Hopefully, April will bring rain.

March 2025 Quilts

Work continues on the king sized bargello quilt. Once pieced, the quilting can begin, and piecing of the baby quilts can start. Quilts are a labor of love as well as an expression of art. I also find quilting a stress reliever.

I hope March 2025  was productive for you.

Is Stagflation on the Horizon?

An Unusual Economic Condition

Stagflation last appeared in the United States of America during the 1970s. The economic condition combines high inflation rates with high unemployment. As most students of economics know, these two functions of the economy usually are inverse to each other. When they act in unison there is strain on the economy, and we call the result stagflation.

Stagflation in the 1970s

Rapidly rising prices combined with wage freezes and layoffs created hardship for most of the 1970s. As a result, Arthur Okun devised a way to measure stagflation. The Misery Index at its’ simplest equation is easy to calculate:

Misery Index= Seasonally Adjusted Rate of Employment + Annual Inflation Rate

Much like the Inflation Rate Challenge of a few years ago, I plan to track the Misery Index throughout 2025. Currently the number reads normal. Thus, the January numbers do not indicate stagflation. However, they are just at the top end of the range. The Seasonally Adjusted Rate of Employment for January 2025 was 4% and the Annual Inflation Rate in January was reported at 3%. So, the numbers bear watching. We start with the Misery Index at 7%. Again, that number reads more like a normally functioning economy, not one experiencing stagflation. But these particular rates are lagging indicators.

Plain Old Inflation

We may just go through another rapid period of inflation similar to that of a few years ago. This time the supply shocks most likely will stem from a combination of tariffs and agricultural woes. Drought and disease are just two factors. Most farmers will agree there is climate change. The argument stems on the cause of the changing weather. But everyone can agree the unknowns of weather patterns have a great impact on farm production.

So, I plan to revisit the Inflation Check Challenge. I will keep some of the items from before. But I am now paying $8.00 for a dozen eggs so those will be watched as well. The first check will be after the February employment and inflation numbers are out so The Misery Index can be tracked, too.

Prediction on Stagflation vs. Inflation

There are a lot of ifs and maybes involved in predicting which way the economy will flow. Current variables include the impact of tariffs, the severity of governmental layoffs as well as private industry slowdowns. Personally, I don’t know of anyone laid off, just of hours cut. Furthermore, how other countries react to the tariffs is unknown.

Countries enjoying unfair competitive advantage can make more concessions than those who believe historical exchanges fall into the Fair-Trade category. Politics comes into play as well as does ongoing military conflict.

Governmental cuts, whether labor or goods, will tend toward a recessionary effect. These cuts are necessary as anyone looking at the Debt Clock can see. (For those who have not checked on the clock in a while, the powers-that-be have added a DOGE component.) The Federal Deficit is near a tipping point which, if reached, will make stagflation look pleasant.

So, while I am certain we will have inflation, I think we will also experience a recession. Thus, the country will undergo stagflation once again.

We can no longer kick the can down the road. In the short-term things will be ugly. But if we do not get the deficit under control, the dollar is in danger of default. And the strength of the U.S.A. will plummet. The country came together after 9/11. Can a unified response to the fiscal mess we are in occur? I hope so, but I do have doubts.