Inflation Melts: The Evidence and Implications

The CPI for December was released on January 12th  (-0.1% M/M; +6.5% Y/Y). As it turns out, inflation was transitory after all – the time frame was 18 months. Supply chains are back to normal, and we see evidence of falling prices everywhere we look. The ISM survey of prices paid in the manufacturing sector […]

Labor Market/Economy Weaker than Headline Jobs Number Suggests

The big story of the first week of the new year was always going to be about the December jobs number. The Wall Street consensus was +203K for Non-Farm Payrolls, but the headline number, at +223K, handily beat that consensus. As a result, the “soft-landing” narrative is back on the table. The cherry on top […]

Outlook: 2023 Recession Likely Deeper and Longer

Last year, our year-end outlook blog was titled: Outlook: 2022 Growth Will Likely Disappoint. And disappoint, it did. Real GDP was negative in Q1 and Q2, and while Q3 showed a slight bounce, through Q3, the economy’s annualized real growth was less than +0.2% (that’s not a typo). Thus, last year’s outlook headline couldn’t have […]

Upon Further Review: That “Hot” Labor Market Is Really “Ice Cold”

There are two surveys put out every month: The Payroll or Establishment Survey, which is the one that gets the headlines, and the Household Survey. The Payroll Survey only surveys large and medium-sized businesses and counts the number of jobs. The Household Survey calls on households and only asks if people in the household are […]

Markets See Recession – But Not The Fed

The CPI for November (+0.1% M/M) was milder than markets expected, which brought the Y/Y CPI inflation rate to 7.1% in November from 7.7% in October. The core CPI (ex-food and energy) rose +0.2% M/M, the smallest increase since August 2021. Excluding shelter, the Core fell -0.1% for the second month in a row, an […]

Despite Black Friday/Cyber Monday – Holiday Sales Will Likely Disappoint

It’s Black Friday/Cyber Monday weekend. Consumers are looking for bargains. Despite what may be a better-than-expected start to the holiday season, for reasons discussed below, the indicators that measure the state of the U.S. consumer are mainly downbeat, and we think that overall, holiday sales will disappoint. So, while we might see an initial surge […]