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Tag Archives: labor market

The Headlines Say Growth…

The headline numbers, for jobs and GDP, and most of the sentiment indexes, would lead one to conclude that the economy was robust and accelerating. Even the Fed agrees, as they upgraded their view of the economy to one now in “solid” growth mode. The reality is that much of the data was distorted by the hurricane rebuild effort, and Q4 data will also be plagued by distortions due to …Read More

“Normal” – It’s the Opposite of What the Media Says

I hear it every day on the business channels or see it in the business media print: “The economy has to get back to normal.”  But normal means different things to different constituencies.  Wall Street and equity investors certainly don’t want to see the stock market behave normally, if indeed, normal means that PE ratios mean revert and that we have periodic 10%-20% corrections.  Everyone, especially the President, would like …Read More

Harvey & Irma: Pushing the Economy to the Tipping Point

Hurricane Harvey devastated the Houston area (and economy), and, while Irma could have been much worse, it still left significant destruction in Florida and the southeast.  What we can say for sure is that the monetary impact of Harvey alone would have been the largest natural disaster in U.S. history, and now we must add on the monetary impact of Irma.  And the hurricane season still has another month and …Read More

Waiting for Market Rationality

Equity markets have yet to recognize the fragility and softness of the underlying economy, although they do appear to be somewhat sensitive to geopolitical issues (North Korea). The incoming data continue to confirm: that the consumer has little spending capacity remaining; that inflation’s roar is nowhere to be found (except, perhaps, in hot dogs); that the detail underlying the headline employment number (209,000) show labor market deterioration; that the equity …Read More

Deflation’s Persistence Implies Yields Will Be Lower for Longer

Despite what you hear from the TV pundits, the U.S.’s second quarter ended on weakness, and there is little evidence that economic acceleration occurred.  In previous years, slow GDP growth in Q1 was followed by 3%+ in Q2.  Not this time!  The Atlanta Fed GDPNow model, which uses a lot of sentiment indicators, is all the way down to 2.4% for Q2.  I suspect that the Commerce Department’s initial GDP …Read More

On a Recession Watch

For the first time since the industrial revolution, the U.S. faces two significant growth issues: 1) a declining labor force; and 2) a job skills mismatch.  The declining labor force is demographic in nature and is occurring in every industrial economy; likely a function of the long-term success of capitalism.   The skills mismatch is a function of technological change that is so rapid that the skills of the existing labor …Read More