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) […]

For Nine Million, Unemployment Benefits Have Suddenly Ended

The Economic Implications One of the major Wall Street investment houses recently lowered their Q3 GDP growth rate from 6.5% to 2.9% (!!), apparently realizing that two-thirds of the quarter was history, that the data have all been weakening (like August auto sales), and that the fiscal stimulus (helicopter money) was now in the rear-view […]

Delta-Variant, Soft Data Bode Ill for Near-Term Growth

The markets waited all week for Fed Chair Powell to speak at the Kansas City Fed’s Annual Jackson Hole Symposium.  Due to the Delta-variant, like many other business meetings, this one was held virtually.  There was growing market concern that Powell would turn somewhat more hawkish, especially since some Regional Fed Presidents appear to have […]

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 […]

The Rate Spike Will Damage the Recovery

Fed Intervention Needed There was quite a spike in interest rates the last week of February with the 10-Year T-Note spiking from a 1.36% level as of the close on Wednesday to as high as 1.60% intraday with a close of 1.55% on Thursday.  Friday’s close was 1.45%.  But, a lot of damage was done. […]

Despite Wall Street Hype, Inflation is Not Imminent

Retail sales rose a record 5.3% M/M in January after three months in a row of decline.  No doubt the $600 checks from the late December “helicopter” money drop played a large role.  The Atlanta Fed now says that their GDP model pegs the current quarter’s growth at +9.5% (Annual Rate (AR)).  In addition, Industrial […]