Don’t be Fooled – The Macro-Economic Picture is Deteriorating

Once again, the Non-Farm Payrolls (NFP) number, at +275K, was well above the consensus +200K estimate. But, that’s where the good news ended. The sister survey, the Household Survey (HS), reported a fall in the number of jobs of -184K. The HS is used to calculate the Unemployment Rate. Since the labor force did not […]

Fed Actions (Inactions) are Key to the Economic Outlook

Over the past week or so, we’ve seen some backup in market interest rates. The 10-Year Treasury yield (chart) closed at a 4.15% on Friday (January 19), up 21 basis points from its 3.94% level a week earlier, and 3.79% on December 26th. The rise in market rates was mainly due to the hawkish tone […]

Recession: The Stars Continue to Align

The oft forecasted Recession hasn’t yet appeared. Has it been avoided (i.e., “soft-landing”)? A look at the growing evidence leads us to conclude that the Recession is coming; we suspect that when the NBER gets around to dating it, this quarter (Q4) will mark its beginning. The first evidence of this showed up in the […]

GDP Growth Will Slow – Likely to Turn Negative

The economic story of the week was the “hot” 4.9% GDP print. The chart shows this in relationship to the recent past, with the dotted line showing the long-run 1.8% growth rate of the economy. The 4.9% is an annualized number, so the actual growth from Q2 was just under 1.5%, and the year/tear growth […]

Rates Spike, Sentiment Softens – Real Inflation Already at Target

Is a Recession Imminent? The relentless upward spike in interest rates continued this past week despite Fedspeak implying that the Fed will continue to be in “pause” mode, at least at the November 1st meeting. Rates on 10-Year Treasury Notes closed on Friday (October 20) at 4.91%. During the trading day, the 10-Year almost pierced […]

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 […]