Go to Top

recession

Using 2020 Hindsight: The Emerging “New Normal” Picture

Using 2020 Hindsight: The Emerging “New Normal” Picture The year finally ended, and, as has been typical, the latest data continued to be downbeat. Despite the weak economic data, the equity market ended the year at all-time highs.  The S&P 500, at 3,576 was up 10.5% for the year after falling 34% in the February/March period, quite the reversal. The current market mantra is that, with the vaccines now in …Read More

Inflation Expectations Rise Even as the Economy Cools

It has now become clear, and mainstream, that the economy weakened significantly in November, and that such weakness will carry forward to year’s end, at a minimum.  The weakness occurred primarily in the services sector as the virus’ resurgence caused some governors to mandate new or additional service business restrictions. As a result, jobless claims have spiked, travel and hotel occupancy fell to even lower levels, and restaurant and other …Read More

Mr. Market Won’t Let the Grinch-Like Economy Steal This Christmas!

The employment data for November were downbeat, and those surveys were taken prior to many newly imposed restrictions including stay-at-home orders. Other economic data, including Black Friday-Cyber Monday spending, and manufacturing and service indexes also disappointed.  Pessimism also showed up in the Fed’s recent Beige Book, its survey of business sentiment. Yet, despite all the downbeat economic news and forecasts, equity markets set new all-time highs the week ended December …Read More

The Economy: On the Other Side of the Abyss

The good news is that a vaccine is definitely coming.  But getting to herd immunity is going to take more than a quarter or two, especially given the resistance of about half of the American population to getting the vaccine, at least early on. The economy is likely to remain soft until well after the pandemic passes.  There are many reasons for this including a decade of poor policymaking and …Read More

The Economy: Through the Rear-View Mirror

The upbeat October employment report is likely showing the labor market through the rear-view mirror. The weekly state employment numbers, too, as reported in the mainstream business media, only tell half the story.  The entire story includes an additional 9+ million people on Cares Act supplements; a program that is growing as state eligibility is exhausted, but a program that expires as the year ends. High frequency data also confirm …Read More

The Real Recession Is Just Starting

At month’s end, we are going to see the BLS announce a 30%+ bounce in real GDP (the Atlanta Fed’s forecast is now above 35%). Much of this is already priced into the equity market, so a positive or negative reaction will only occur if the reported number is significantly above or below the consensus view. In addition, this is old news, as Q3 will have been in the rear-view mirror for …Read More