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No “Boom,” No Systemic Inflation Instead, a Return to “Normal”

In many parts of the country, no more masks!  Businesses reopening.  And, it sure does look like the impact of the latest stimulus checks (helicopter money) faded fast.  Despite the fact that the IRS continues to send out billions more in stimulus funds as they process 2020 tax returns, April Retail Sales fell -0.7% M/M.  Market expectations were for a rise of +1.0%.  In the retail sales world, this is …Read More

Employment and Inflation: The Double Whammy

As much as the big miss in employment was a shock on Friday May 7, the May 12 CPI data turned out to be a double whammy.  April headline CPI came in at +0.8% M/M, while market consensus was +0.2%, another huge miss by market forecasters.  Y/Y CPI was  +4.2%, up significantly from March’s 2.6% Y/Y print. What appears strange to us, and looks to be contradictory to reality, is …Read More

The “Boom” Is Off the Rose

The employment number was a shock to the “boom” economy narrative; it was the biggest consensus miss in history! The majority of forecasters, even those with scores of economists and huge budgets, simply got the “boom” narrative wrong.  The Payroll Survey employment number was an “aberration” they hastily said.  But the sister Household Survey tells the same story. While Initial Unemployment Claims (ICs) are falling, they are still at recessionary …Read More

The “Economic Boom” Illusion

Upbeat data continues to make headlines. (The not-so-upbeat are relegated to the back pages.)  This week it was the +6.4% spurt in real GDP.  And, while the financial markets do feel a bit toppy, the S&P 500 still managed to eke out another record close on Thursday, April 29 (4211.47).  “Help Wanted” signs continue to be ubiquitous.  Companies are raising wages just to attract applicants.  The prices of lumber and …Read More

When the Stimulus Tailwinds Fade

Prologue Big numbers are showing up in U.S. economic data, partly due to the low levels of economic activity a year ago, partly caused by the reopening, and partly caused by the generosity of Uncle Sam.  We’ve had three helicopter money drops, two of them in 2021.  The economy is rapidly reopening as seen from the latest OpenTable data which shows U.S. restaurants in late April down -20% to -30% …Read More

U.S. Data Says “Boom:” Part Base Effect, Part Transient, Part Real

Prologue The much anticipated economic boom has finally arrived!  The NY Fed Weekly Economic Index exploded to the upside in late March and early April (see chart above).  Retail Sales were up an amazing +9.8% M/M in March!  That number is not Y/Y.  The Y/Y number was +27.7%, but was greatly influenced by depressed Retail Sales last March when the economy was beginning to shut down.  April’s Y/Y number will …Read More