Over the last two years, the evolution of the US economy has been driven by a return to “normal”. The distortions of the response to COVID had a profound impact on the economy that I believe will persist for many years. The change in cash levels at the household level were large and have proved more persistent than most expected. [...]
Personal consumption of services is 45% of US GDP. Employment is strong and the service sector continues to be strong. S&P Global PMI report came in at an expansionary 51.4. Output rose for the 3rd straight month and at the sharpest rate since July. New orders rose at the fastest rate since June. This translated into employment clocking in at [...]
The Empire State Manufacturing Survey showed declining activity in December after a positive November. It is also still showing declining future orders. Services in NY region also showing declining activity but also some optimism for the beginning of 2024. Disclaimer: This information is presented for informational purposes only and does not constitute an offer to sell, or the solicitation [...]
The current business environment dropped to it's lowest level of 2023, -18.2, meaning 18.2% more of those surveyed think the economy slowed since last period. This mirrors economic readings from the earlier regional surveys. Yes, slowing activity, but Q3 was very strong, so not completely unexpected. If the trend continues after this softening, we will be at levels which cause [...]
The first half of the year is over and despite a few bank failures and three more rate hikes by the Fed, stocks and bonds both managed to produce gains in the first six months of 2023. Growth stocks were the big winners as the market for most of the first half was trying to price in rate cuts before [...]
The stock market surged last Friday after the employment report showed a gain of over 300k jobs while the year-over-year change in average hourly earnings fell to 4.3%. That was the popular explanation and it makes sense; continued economic growth and fading inflation pressures would certainly seem a big positive (although wages have little to do with the recent bout [...]
I've been writing for over a year about the economy rebalancing back to its pre-COVID trends. The massive fiscal expansion during COVID and the Fed's accommodation of that spending via QE is what caused the spike in prices over the last 18 months. Yes, there were supply issues too but the size of the demand shock overwhelmed the supply issues. [...]
Is the US economy on the verge of recession? Is it already in recession? We have several indications that the US economy is slowing and at least one that points to recession soon and maybe now. From the Conference Board's release of its Leading Economic Indicators last week: “The US LEI fell for an eighth consecutive month, suggesting the economy [...]
The employment report released last Friday was better than expected but the response by bulls and bears alike was exactly as expected. Both found things in the report to support their preconceived notions about the state of the economy. I do think the bulls had the better case on this particular report but there have been plenty of others recently [...]
We always have to keep in mind that the major economic accounts perform poorly during inflections. Europe in early 2018, for example, was supposed to have been just booming only to have run right into the brick wall that was Euro$ #4. Statistics like Real GDP picked up the downshift, but didn’t quite nail the degree to which the European [...]
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