The Economy Has ‘Recovered’ – Anemic Growth To Follow

The September jobs report was filled with cross-currents, some showing possible economic weakness, some showing strength. This makes the Fed’s job exceedingly difficult. Is the economy strengthening or weakening? What’s the correct monetary policy prescription? “Taper” asset purchases? Raise interest rates? Since September payrolls were so ambiguous, perhaps October’s (which will be available to the Fed prior to its November meeting) […]

Inflation Is Fading; So Is The Economy; But Jobs Will Grow

The “inflation” story has now moved to page two, not because it isn’t still the financial media’s mantra, but the disaster of the Afghanistan exit has taken its place.  We don’t think it will make its way back to page 1.  The reason: the burst of economic activity, for the Q1 and Q2 economic reopenings, […]

The Payroll Numbers Won’t Prevent Economic Growth From Softening

Employment was the big story of the week with headline Payroll Employment rising +943K Seasonally Adjusted (SA). The consensus estimate was +870K, so, apparently, a big beat. But, looking beneath the surface reveals that this isn’t quite what, at first blush, it appears to be. Since the pandemic began, we have held the view that the Not […]

Growth Risks To The Economy Intensify

Mask mandates now are a reality in many parts of the country. That can’t be good for economic growth in Q3. The first pass at Q2 GDP came in light, with growth of +6.5% where the consensus was north of 8%. Despite that disappointment, markets seemed to like the number, even as Amazon, the poster-child company for pandemic […]

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 […]

The Recovery Stalls; Fed Pledges “Lower for Longer;” Equity Markets Pause

With the Fed pledging to keep rates low even when (or if) inflation rises above its 2% target, it is hard to see why long-term Treasury yields (and those of other quality issuers) won’t move toward yields of similar debt in the world’s other industrial economies (i.e., Europe and Japan). The economic lull is now […]