“His book suffers from excessively long harangues against Pecksniffian prigs and temperance types who, he claims, are still trying to ruin our fun.”
Fefer D. Fefer, Seattle Weekly, January 22, 2003
According to the indefatigable Merriam-Webster, “Seth Pecksniff, a character with a holier-than-thou attitude in Charles Dickens’s 1844 novel Martin Chuzzlewit, was no angel, though he certainly tried to pass himself off as one. Pecksniff liked to preach morality and brag about his own virtue, but in reality he was a deceptive rascal who would use any means to advance his own selfish interests. It didn’t take long for Pecksniff’s reputation for canting sanctimoniousness to leave its mark on English; ‘Pecksniffian’ has been used as a synonym of ‘hypocritical’ since 1849.” Synonyms for this disparaging term include, but should not be limited to: dishonest, deceitful, untruthful, contrived, unnatural, devious, assumed, mechanical, strained, insincere, simulated, bogus, false, affected, simplistic, forced, phony, claptrap, put-on, sham, backhanded, inappropriate, phony-baloney, feigned, double, two-faced, jive, artificial, counterfeit, fake, meaningless, lip, hollow, Janus-faced, mealy, mealymouthed, pretended, glib, double-faced, superficial, casual, facile, breezy, left-handed, and empty.
Until I stumbled across the beautiful alliteration of today’s title, I’d settled on (Dis)ingenuity. You’ll agree Pecksniffian outdoes itself in describing the disingenuous comportment of one Jerome Hayden Powell at his press conference following Wednesday’s conclusion of the final Federal Open Market Committee meeting of 2024. Let me count the ways! On behalf of the Cleveland and Philadelphia Federal Reserve staffers he snubbed, let me say it for them: “Shame on you Chair Powell.” In the case of the former, its New Tenant Repeat Rent Index is at 1.0% YoY. As for the Philly Fed, it’s easier to quote: “For the second quarter of 2024, payroll jobs in the 50 states and the District of Columbia edged down 0.1 percent, after adjusting for the Quarterly Census of Employment and Wages data.”
Let’s pick this apart based on what any Fed chair knows or is taught within months of being confirmed. A) Recession begins after payrolls have begun to contract, i.e. before (best-case scenario) June of 2024, by the time we know payrolls began to contract. The likeliest candidate is April 2024, when the level of unemployment first breached the 10% threshold, the McKelvey Rule was re-triggered, and the Sahm Rule was first breached. B) Shelter carries the heaviest weight in all measures of inflation.
ERGO, History does not suggest, it dictates that unemployment is headed up and inflation down.
To this, Powell stressed that we’ve been “really worried about” housing services inflation. The good news? “It really has come down now quite steadily at a slower pace than we thought two years ago, but it’s nonetheless steadily coming down as market rents start to equilibrate better with new leases that turnover, not new tenants, but new leases. Market rents is new leases.” As for those day-jobbers in Philly, “If you have a job you’re doing very well, and layoffs are very low, right? So people are not losing their jobs in large numbers.”
With a nod to the Cleveland Fed’s data, which he then ignored, and an affront to the Philly Fed’s analysis revealing that job losses began in June 2024 (at the latest), Powell pretentiously presided over an upgrade to the Fed’s job market outlook and a downgrade to its inflation forecast. How very Pecksniffian.
To add insult to the Philly Fed staffers’ injury, they would have presented to Powell et al proof that the post-election bounce was ephemeral as evidenced by the retreat of their critical chemicals manufacturing hub in Future Business Conditions (blue line) and the concurrent spike in Future Inventories (yellow line) as demonstrated in violent z-score reversals. It’s likely New York Fed staffers also took a shot at dissuading Powell’s pomposity – its factory sector saw a retreat in Future Business Conditions (orange line) on par with its Philly peers, and an even deeper U-turn in Future Inventories (purple line).
Dare say, Kansas City Fed staffers found themselves trepidatious in the face of Powell’s implausible deniability. Perhaps better, they deduced, to average the negativity of their Workweeks with those of New York and Philadelphia counterparts to stand out less (light blue line). That way, they wouldn’t stand out as much as their peers did despite the full-on retreat to a level seen in the last real downturn, that of the Great Recession, with September 2008, the month Lehman fell. Need Powell be reminded, three months later, in December 2008, the Median Duration of Unemployment fell to 10.5 weeks (dotted lilac line), a level that matches the drawn-out exile recorded first in the current cycle in November 2024 (lilac line).
If it took as long as it does today to land a new job ELEVEN months into the Great Recession, it’s fair to ask: Where are we in the current cycle? Only time will tell, as the National Bureau of Research primes itself to declare when recession began in 2024. What we can say is the last time continuing jobless claims were rising in 77% of states – May 2023 – no one would have said the U.S. economy was contracting (lime lines). On the other hand, as Powell so duplicitously displayed, you’d have to go back even further in time to see this many workers worried about finding a job should they become unemployed (red line). At the risk of being Pecksniffian, we’re sure these fears are all in workers’ minds.