The Recession Will Bring Deflation
If there ever was a competition for a company that most reflected the state of the economy, FedEx would be in the final four. In Q1, its revenues fell -10%, and earnings were off -28%. On top of that, they guided even lower than the already reduced market estimates. Nevertheless, the media and Wall Street […]
The Recession No One Will Discuss
As Equity Investors Rush to Exit Employment – Weaker than the Narrative The markets yawned at April’s headline Payroll Survey number (+428K) despite the media’s characterization of the report as “strong.” That’s because, upon further analysis, the most charitable description would be, in our view, “mixed.” In fact, “worrisome” would be our best characterization. Here’s […]
The Pandemic Caused Significant Economic Impacts; Not All Inflation Is Related
Over the last several blogs, we have opined that the pandemic hasn’t changed the economy’s potential growth path. The chart shows GDP growth rates beginning in the mid-1990s (with the Atlanta Fed’s +1.3% Q3/2021 forecast). The horizontal line shows a 2% growth level. Note that the left-hand side of the chart shows much higher growth than the right-hand […]
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 […]
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 […]
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 […]