Senator Sam Brownback and Representative Jim Saxton have released an
updated version of Recent Economic Developments today, titled
“Unprecedented Fed Actions, Recession Signs, Stagflation Fears.”
Highlights of the report are:
- The Fed agreed to take $29 billion of assets onto its balance
sheet, retaining private asset management firm BlackRock Inc. to manage
the portfolio which is, effectively, owned by U.S. taxpayers. This
raises many public policy issues.
- The unemployment rate rose to 5.1% in March, from 4.8% in February.
- Non-farm payroll employment declined by 80,000 in March, the 3rd
consecutive monthly decline. Higher unemployment and declining payrolls
suggest that we may be in a recession.
- GDP growth was an anemic 0.6% in the 4th quarter. Fears of stagflation have arisen given: slowing growth; rising unemployment; employment declines; rapid increases in energy and food prices.