With the Democratic Party staging the first of its national debates, The New York Times found time to embed a reporter amongst a group of Trump voters in the swing state of Michigan. Situated to watch the show, and given how the election of 2016 turned out, the Rust Belt is on the minds of both parties. It doesn’t seem, [...]
The easy answer for “muted” inflation is consumers. Forget the unemployment rate debate. Let’s assume that labor markets are tight. Workers are scarce and companies have to compete, and pay up, to secure labor. Input costs are rising. That doesn’t necessarily guarantee an accelerating CPI or PCE Deflator. There is a final step in the Fed’s recovery process. Those labor-driven [...]
The economic data reported over the last month managed to confirm both that the economy is slowing and that there seems little reason to fear recession at this point. The slowdown is mostly a manufacturing affair - and some of that is actually a fracking slowdown - but consumption has also slowed. On a more positive note, housing seems to [...]
At the end of last week, the Bureau of Economic Analysis reported data on US Personal Income and Spending that hit every sour note. There was the lowest inflation rate, the deflator to those spending figures, in years as well as the clear need to officially anoint a successor to the Verizon madness. The release also featured residual seasonality, and, [...]
We're changing the format on our Macro updates, breaking the report into two parts. This is part one, a review of the data released the previous month with charts to highlight the ones we deem important. We'll post another one next week that will be more commentary and the market based indicators we use to monitor recession risk. We are [...]
Over the last decade, the US economy has been experiencing “residual seasonality.” It has begun each year unusually weak. For Economists expecting it take off in each and every one, this is more than a thorny contradiction. When it happened again in 2015, at the worst possible moment for the mainstream view, they had finally had enough. The Bureau of [...]
I wrote back in August 2016 out of frustration. There were any number of topics to have become flustered over at the time, but on this particular occasion it was the personal savings rate. Because it is, like productivity, essentially a plug in between two statistics whenever those two particular series, income and spending, are subjected to revision it can [...]
Welcome to the slowdown. It isn't much - yet - and it may just be a passing phase, but there is little doubt that the US economy has slowed somewhat. The rise in short term interest rates has stalled and the long end of the curve has rallied. The result is a flatter yield curve but it isn't the flatness [...]
The plural of anecdote is not data. At any given time in any given economy you can find counterexamples. During the Great Depression, for example, millions of Americans were doing very well for themselves. It wasn’t difficult to locate and talk to those who were prospering during what was a legitimate catastrophe. It’s never all or nothing. Rather, the issue [...]
In the last update I wondered if growth expectations - and growth - were breaking out to the upside. 10 year Treasury yields were well over the 3% threshold that seemed so ominous and TIPS yields were nearing 1%, a level not seen since early 2011. It looked like we might finally move to a new higher level of growth. [...]
Stay In Touch