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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 mirror.  Readers of this blog know that we have been discussing much slower growth than …Read More

A Softening Economy Will Be Buffeted by Stimulus Withdrawal

While the story of the week was the big “miss” in Nonfarm Payrolls, most of the incoming data continue to be much softer than the markets or financial media let on, as they continue to ignore the implications.  The chart above shows U.S. vehicle sales beginning in 2015.   Note the steady sales levels until the pandemic, the climb out to just above normal, and now a renewed falloff.   Sales in …Read More

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 done so in recent speeches and media appearances.  As a result, interest rates, as measured …Read More

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, and the rounds of helicopter money are now both in the rear-view mirror.  Almost all …Read More

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 Seasonally Adjusted (NSA) data present a truer picture than do the SA. The pandemic’s distortions haven’t …Read More

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 America, disappointed. Growth Some street economics departments are now seeing Q3 and Q4 with jaundiced …Read More