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March 2018

The Middle Class Continues to Fall Behind

February’s job growth was significantly stronger (+313,000 Establishment Survey) than market expectations (200,000).  Strangely, though, the unemployment rate (U3) remained at 4.1% (Household Survey) for the fifth straight month.  Why?  Because a significant number of those who had previously stopped looking for work rejoined the labor force, perhaps indicating more labor force slack than the unemployment rate would indicate.  The biggest disappointment, however, was the slowdown in the growth of …Read More

Get used to heightened market volatility

The sentiment surveys indicate that the economy continues to perform well. The underlying data say otherwise. People take their cue from the stock market when it comes to assessing economic health. And, as long as the stock market is near dizzying heights, the sentiment surveys will say the economy is doing well. The hard data  January’s data showed negative retail sales vs. December, negative real weekly income, negative aggregate hours …Read More

The Fed’s new bubble – Part 2

In part I of this two part series, I discussed the possible rush for the exits and market volatility in what I saw as a long overdue correction. The violence of the correction and the extremes of volatility that I worried about have now actually appeared. As I rewrite the introduction of this part II, conventional Wall Street wisdom has now become that the correction and volatility are due to the …Read More