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Tag Archives: CARES Act

Policy Rx for Recession Aggravates Income Inequality

T’was the week before Christmas and all through the house, not a creature was spending, not even your spouse; the stockings were hung by the chimney with flairs, in hopes that the Congress would supplement CARES. And so, it appears that the economy continues to deteriorate as the Congress attempts to put together another stimulus without provisions for certain favored constituents of either party – much easier said than done.  …Read More

The Real Recession Is Just Starting

At month’s end, we are going to see the BLS announce a 30%+ bounce in real GDP (the Atlanta Fed’s forecast is now above 35%). Much of this is already priced into the equity market, so a positive or negative reaction will only occur if the reported number is significantly above or below the consensus view. In addition, this is old news, as Q3 will have been in the rear-view mirror for …Read More

Weak Employment Data, Savings Out of Bullets

Personal income fell -2.7% in August.  Still, consumer spending rose 1.0% M/M.  What Gives? The economy is still very much an employment story.  While the official U3 unemployment rate fell to 7.9% from 8.4%, the underlying data was, simply put, “ugly!” “Excess” Savings Last week, I discussed the theory that the “excess” savings from the stimulus packages (one-time stimulus checks and the now expired supplemental $600/week in unemployment benefits) would …Read More

The “Excess Savings” Hypothesis vs. Economic Deceleration

There is some speculation that because only a little more than half of the buildup in savings from the stimulus checks and enhanced unemployment benefits was spent through July, Q4 economic activity will continue to show recovery as the “savings” continues to be spent.  Call this the “Excess Savings” Hypothesis.   Unfortunately, the incoming data makes this appear to be little more than “hope.” The weekly state and PUA unemployment data …Read More