Bad retail sales report, bad!

There's a lot to unpack today and not enough time to do so.  Instead,  I'll just share some highlights across a few posts, starting of with some retail expert fears about a really bad recession, like 1970's level bad.  

More bad news with the retail sales report.

Could it be that the Fed's fighting inflation will lead to more quarters of negative GDP?  Absolutely. Higher interest rates are a clear way to slow the economy, and we are already in a technical recession.  Could this recession be one that doesn't hurt employment?   Given the baby boom retirement and a lack of replacement population to fill those jobs, again, absolutely. 

Could it be a stagflation situation?  Given the above two points, absolutely. What will be weird is a combination of high interest rates, with inflation, negative GDP, lower retail sales and yet unfilled jobs and low unemployment.  In that scenario, low unemployment is not a good apple among the bad; it's a recipe for upward pressure on wages and further inflation.  It's a potential feedback loop.  There's a lot to be worried about, even if the GOP win the congress and senate, this track we're on, we may already be too far down it to make a difference in the near term.