Economy

10/14/2022

Economic Update Fall 2022

The U.S. is in the late-cycle expansion phase with high recession risks. The economy is contracting. U.S. economic growth disappointed through the first half of the year, with the average of Q1/Q2 growth contracting by 1.1%. A tight labor market makes it difficult to make a recession call. The contraction has not been deep enough to cause unemployment to rise by a few percentage points. A significant rise in unemployment is the telltale indicator of every recession. There is hope that any recession will be a mild and short lived because unemployment may only rise from today’s extremely low rate of 3.5% to 4.5% rate and not reaching a 6% rate level characteristic of most recessions.

Economic Update Fall 2022

July 6, 2022

Economic Update Summer 2022

First-quarter growth declined at a 1.6% annualized rate, and an estimate from the Atlanta Fed, GDPNow tracker, project -1.9% GDP growth rate in the second quarter. Two consecutive quarters of negative real growth is a technical recession by one definition. According to the National Bureau of Economic Research (NBER), a recession refers to a significant decline in economic activity, lasting more than a few months, normally visible in real gross domestic product, real income, employment, industrial production, and wholesale-retail sales. The U.S. economy is not there yet but slipping that way.

Economic Update Summer 2022

April 12, 2022

Economy Spring 2022

The U.S economy remains in an expansion. Real gross domestic product (GDP) increased at an annual rate of 6.9% in the fourth quarter of 2021. The GDPNow model estimate for real GDP growth in the first quarter of 2022 is 1.1%. For the remaining quarters GDP is projected to grow on average 3%. Next year, TD Economics forecast U.S. economic growth of 2.2%.

The U.S. economy is going through a transition period this year. I am more in the stagflation camp over the next twelve months and not recession. Stagflation looks like 1.1% economic growth and y-o-y inflation of 8.5%! I see inflation peaking by the summer and dropping by year-end. It is difficult for U.S. economy to fall into recession given consumer strength and strong employment numbers.

Economy Spring 2022

01/19/2022

Economic Update Winter 2022

US economy grew at 5.6% rate in fourth quarter 2021 and 5.8% for 2021! Supply chain constraints, labor shortages, and Omicron related slowdown effects have modestly slowed down the world’s largest and most resilient economy. Economic growth rate will remain higher than normal but has peaked as fiscal and monetary stimulus is waning this year. Overall, consumer demand, household wealth, low employment, easy credit conditions, provide a backdrop for sustained expansion in 2022. Recession risks are quite low.

Economic Update Winter 2022

10/14/2021

Economy

US economic growth hit a soft patch in the third quarter due to supply chain constraints, labor shortages, and Delta Variance related slowdown effects. Growth rates will remain higher than normal but have peaked as fiscal and monetary stimulus is waning. Overall, pent-up consumer demand due to supply shortages, supportive fiscal and monetary policy, and favorable credit conditions provide a near-term backdrop for sustained cyclical improvement. There is no sight of a recession ahead.

Economy

July 2021

Global and U.S. Economic Commentary

The global economy continued its strong path to recovery, expanding last quarter at its fastest pace in over 15 years. Vaccination rollouts, the easing of stringency measures, monetary and fiscal stimulus, have contributed it's robust broad recovery.

Global and U.S. Economic Commentary

April 2021

Global and U.S. Economic Commentary

Global economic growth is accelerating and projected to reach 6.1%, and 7.2% in the United States in 2021. Recovery is being fueled by massive fiscal and monetary policy support. With the vaccination rollout gaining pace unleashing trillions of dollars in economic activity.

Global and U.S. Economic Commentary

January 2021

Global Economy Continues to Grow, Despite Covid

The global economy continued to grow at a firm pace at the end of 2020. Rising COVID cases and renewed lockdowns in many parts of world have so far inflicted only limited damage on the global economy.

Global Economy Continues to Grow, Despite Covid

October 2020

Driving Toward Recovery

The pace of the recovery in 2021 will depend not only on the course of COVID, as well as development of vaccines, and therapies, but also public policy.

Driving Toward Recovery

July 17, 2020

Buckle Up for Bumpy Recovery

Fundamentally, conditions show a remarkable improvement thanks to the government’s quick fiscal and monetary response. Without question, I think the worst is behind us, but the recovery path remains bumpy.

Buckle Up for Bumpy Recovery

April 1, 2020

Second Quarter Collapse in Economy Seen as a Transitory Natural Disaster

The 2019 4th Quarter GDP report shows the economy was holding up well before the Covid-19 pandemic. Economists' projections for the next few quarters vary considerably, but most show only one quarter of negative growth.

Second Quarter Collapse in Economy Seen as a Transitory Natural Disaster