Last week U.S. economic data included the Labor Department’s report on initial filings for unemployment benefits, at historically low levels. Also last week, the Commerce Department reported the U.S. housing market (new homes and permits) was the strongest since 2007. Then came the Philadelphia Fed’s index of manufacturing business activity in September, more than doubling estimates as factories continue to expand. And if that wasn’t too much winning, the Commerce Department then announced August retail sales growth was double expectations. Main Street USA is very strong.
None of the economic data supports the almost month-long ‘recession narrative’ pushed by financial pundits and media narrative engineers; and next week the second estimate of Q2 GDP growth will be released. Attempting to retain the smallest remaining whiff of credibility, the Bloomberg economists now announce they’re cancelling the recession.
Yes, in a piece titled “Hold That Recession – U.S. Indicators are Trouncing Forecasts“, Bloomberg admits the economy doesn’t match their gloomy narrative:
(Bloomberg) — The U.S. economy is outperforming expectations by the most this year, offering a fresh rebuttal to last month’s resurgent recession fears fueled by the trade war and a manufacturing slump.
The Bloomberg Economic Surprise Index has reached an 11-month high after four indicators released Thursday, including existing home sales and jobless claims, each surpassed expectations.
The gauge continued to advance after swinging to positive from negative on Tuesday for the first time this year. The data also pushed a similar measure produced by Citigroup Inc. to the highest level since April 2018.
“It says things are getting better,” said Jim Paulsen, chief investment strategist at Leuthold Group in Minneapolis “There’s a definitive change in the growth profile and there’s an acceleration in growth. It’s interesting how pessimistic the attitudes still are among investors, yet when you look at surprise indexes, you would think people would feel better about growth. There’s a disconnect.” (read more)
Yes, there is indeed a “disconnect”. We’ve been talking about it on these pages for almost ten years. When you focus on the America-First economic agenda, Main Street thrives. However, the outcomes for Wall Street are no longer attached to the success of Main Street USA.
And when you apply MAGAnomic policy, well, the Era of De-Globalization is here.
There is nothing that China and the EU can do to stop the de-globalization process; and efforts to stimulate their economy, more quantitative easing (pumping money) while the global supply chains are being shifted, are futile.
The more a nations’ economy is dependent on exports, the more exposure they have to the inherent downsides of de-globalization.
They had cancel to we just were not going to participate in their recession.
This month-long narrative has been more than wishful thinking, it has been an attempt at trying to depress our economy by continually saying it is going south.
Trying to get a small snowball to gather steam and grow as is rolls downhill.
All that failed.
Maybe they should stop using the climate fanatics’ computer models to predict economic futures. Once again, liberals plug in their desired outcomes then backfill the data to reach that outcome. It doesn’t work very well but in the short-term, but as long as it is aimed at ignorant people, it achieves the desired result and will continue.
Liberals simply don’t understand economics. They believe the only way to grow the economy is to keep taking money away from the successful so they will produce more, like pruning a tree.
My boss a few weeks ago smiles at me and said, ” Now what to you think about Trump’s economy?” as the DOW dropped 700 points. I said, ” well if you look at the difference between the stocks that are tanking on the DOW and those who are making good profits and paying good dividends, you will see that it is US companies that are thriving and companies heavily involved in international business that are dragging down the DOW. My 401 K is doing quite well. If Trump can stay on for 12 more years, I will be able to give my retirement savings to my grand children virtually untouched!” It is not the Main Street companies that are causing the huge fluctuations in the DOW. It is the left media and all those Democrats who want to see a recession.
Too true, Randy.
You make a great point about the US portion of the DOW.
We retired 6+ years ago.
During the end of the Obama Admin our stocks were going steadily up so it was easy to not spend too much out of our retirement funds.
But, since Trump became president it has been EASY to make money on our retirement funds!
Thus, over these years we have spent down ZERO dollars on average.
We have made money in these past three years.
Tighten our belts in retirement?
Just the opposite.
We travel when we want, eat lavishly, (keto-ish) enjoy live sports and other live shows like Circ de Sole.