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 […]
Trade Wars Will Slow Growth
Q3 started out with several very positive days in the equity markets, due to the seeming “Goldilocks” economy (solid growth, low inflation, best employment market in 50 years), likely in anticipation of continued 20%+ earnings reports (the tailwind of tax reduction), and, at least in the early days of July, from a lack of any […]
Economic Growth: Its Importance and the Potential Impact of its Demise
Conceptually, economic growth is a function of two factors: the growth of jobs, and the productivity of those employed. In a world where the labor force of industrialized nations is stagnating, or, worse, shrinking, one might reasonably ask: “Why is economic growth, as measured by the increase in real GDP, so important to the economy?” […]
“Normal,” It’s Not What You Think!
Most readers remember the pre-recession days of 4% GDP growth, interest rates at levels where savers had return choices worth pursuing (e.g., the 10 year T-Note at 4%), and workers could count on annual real wage growth. Today, many refer to this as “normal,” and there is a desire, if not a movement, to return […]
The 1937 mistake – will Fed make it again?
The markets breathed a sigh of relief (up 164 followed by 99 Dow points) when, in the middle of September, the Fed decided not to raise the federal funds rate. The DJIA was as high as 18,538 on Sept. 6, but fell 504 points over the next six trading days, including three days in a […]