Whither the economy?
Retired? Planning to retire soon? Expecting your nest egg to provide substantial income in retirement? If so, you should be keeping a wary eye on the economy in the next year.
I'm a scientist, so data mean more to me that soothsayers. I default to blogs that provide data to substantiate their prophecies.
" In the short term, I remain on “recession watch,” but the base case going forward remains slowdown only. That’s because the risks are still elevated, at least for the next few months. Manufacturing remains in a slight contractionary trend, and there are a few hints, like in elevated jobless claims for 5 of the past 6 weeks, that the weakness may be spreading out into the wider economy. If this were 40 or 50 years ago, it would almost certainly mean a recession. But with less than 10% of all jobs in manufacturing now, the consumer side of the economy is relatively much more important. And the most usual driver of consumer contraction has been a spike in the price of gas.
On the bright side, without such a spike, I remain in the slowdown vs. recession camp. On the cautionary side, as shown above, inflation ex-energy stands at 2.3%, only 0.2% below the threshold where the Fed appears to feel pressure to apply the brakes. If that is paired with late-cycle wage pressure, the Fed may be out of breathing room in the near future."
Read the data here:
https://seekingalpha.com/article/4313958-expect-2020-to-begin-2019-is-ending-in-near-zero-growth-environment
I'm a scientist, so data mean more to me that soothsayers. I default to blogs that provide data to substantiate their prophecies.
" In the short term, I remain on “recession watch,” but the base case going forward remains slowdown only. That’s because the risks are still elevated, at least for the next few months. Manufacturing remains in a slight contractionary trend, and there are a few hints, like in elevated jobless claims for 5 of the past 6 weeks, that the weakness may be spreading out into the wider economy. If this were 40 or 50 years ago, it would almost certainly mean a recession. But with less than 10% of all jobs in manufacturing now, the consumer side of the economy is relatively much more important. And the most usual driver of consumer contraction has been a spike in the price of gas.
Read the data here:
https://seekingalpha.com/article/4313958-expect-2020-to-begin-2019-is-ending-in-near-zero-growth-environment
Comments
Post a Comment