He's phrasing it differently but he's coming to pretty much the same conclusion I am. "Muddling along" is really just another framing for "stagflation", which is the outcome you get when your positive gains are merely marginal.
He's saying don't put too much faith in the latest numbers, and I'm saying Jay Powell is sure to put way too much faith in the latest numbers. To differentiate farther than that would require at least one pitcher of quality beer!
Inflation in groceries is getting worse and gas has gone up where I live, just outside of Houston, Tx. Wages are still stagnant and layoffs continue in many sectors. To me this uptick you showed in charts, thanks for your hard work, by the way, does not reflect the reality of most Americans and is falsely created by Congress pumping money into 'infrastructure'. But I am not nearly as smart about this as you. I still feel like the ship is sinking, even if people on the top deck are having a party.
The unstated rule of thumb to all macroeconomic data is "Your Mileage May Vary". Within the US economy there are regional variations that can be quite significant.
Thus while food price inflation is trending down nationally, we must remember that "disinflation" is a four dollar term for "prices rise a bit more slowly". That coupled with the reality that even nationally food price inflation is still well above the headline rate underscores the marginal nature of the recent spate of good economic news.
There has been some positive metrics released. That's undeniable. But the movements are small relative to what needs to be seen for all parts of the country to be moving up. That's the nature of marginal movements: there are increases and decreases buried in the overall data, with just a few more increases than decreases.
Is the ship still taking on water? For some people, yes. A whole lot more economic "water" needs to be pumped out before this ship can float on its own again.
I’m relieved to see that the banking situation is probably going to avoid a liquidity crisis, and yes, there’s some good economic news in many indicators. However, many of these graphs show mere upticks, not steady upward trends. An uptick can very easily tick down again, right? So it’s seems to me that the Bidenomics people are calling for celebration way too soon.
One of the common-sense reasons is a lag factor in certain consumer decisions. An example is big-ticket purchases. If a middle-class family endures a few years of inflation, as we did during the Covid era, they maybe don’t have to change their buying habits for awhile. But eventually their savings dwindle and they decide, well, let’s make the car last two more years before we buy a new one. And Junior can get by with his current laptop for another year, we don’t absolutely have to have a new dishwasher yet, and the roof will have to wait awhile to be re-shingled. If this is the situation to the entire middle class, then boom, suddenly you have two quarters when major purchases plunge. Or several quarters, if we remain in stagflation.
You’ve convinced me that the Fed has been pursuing a flawed strategy, and I have little confidence they will change. I remain concerned about our economic future - and that’s not even factoring in the national debt, creeping socialism, and trillions in derivatives!
Also, Balaji has a good article about how reliable (or not) government numbers are these days.
https://balajis.com/p/too-fake-to-tell
Michael Maharrey at Schiff gold had an interesting article about some of these numbers as well : Economic Data Isn’t as Strong as the Headlines Claim
https://schiffgold.com/key-gold-news/economic-data-isnt-as-strong-as-the-headlines-claim/
Don't know if you have read it. Linking your article and his as well today @https://nothingnewunderthesun2016.com/
He's phrasing it differently but he's coming to pretty much the same conclusion I am. "Muddling along" is really just another framing for "stagflation", which is the outcome you get when your positive gains are merely marginal.
He's saying don't put too much faith in the latest numbers, and I'm saying Jay Powell is sure to put way too much faith in the latest numbers. To differentiate farther than that would require at least one pitcher of quality beer!
I'm assuming your quality beer is definitely not Bud Lite!!!!
Ahem! Bud Lite is not now nor has it ever been "beer".
Inflation in groceries is getting worse and gas has gone up where I live, just outside of Houston, Tx. Wages are still stagnant and layoffs continue in many sectors. To me this uptick you showed in charts, thanks for your hard work, by the way, does not reflect the reality of most Americans and is falsely created by Congress pumping money into 'infrastructure'. But I am not nearly as smart about this as you. I still feel like the ship is sinking, even if people on the top deck are having a party.
The unstated rule of thumb to all macroeconomic data is "Your Mileage May Vary". Within the US economy there are regional variations that can be quite significant.
Thus while food price inflation is trending down nationally, we must remember that "disinflation" is a four dollar term for "prices rise a bit more slowly". That coupled with the reality that even nationally food price inflation is still well above the headline rate underscores the marginal nature of the recent spate of good economic news.
There has been some positive metrics released. That's undeniable. But the movements are small relative to what needs to be seen for all parts of the country to be moving up. That's the nature of marginal movements: there are increases and decreases buried in the overall data, with just a few more increases than decreases.
Is the ship still taking on water? For some people, yes. A whole lot more economic "water" needs to be pumped out before this ship can float on its own again.
Totally agree!
I’m relieved to see that the banking situation is probably going to avoid a liquidity crisis, and yes, there’s some good economic news in many indicators. However, many of these graphs show mere upticks, not steady upward trends. An uptick can very easily tick down again, right? So it’s seems to me that the Bidenomics people are calling for celebration way too soon.
One of the common-sense reasons is a lag factor in certain consumer decisions. An example is big-ticket purchases. If a middle-class family endures a few years of inflation, as we did during the Covid era, they maybe don’t have to change their buying habits for awhile. But eventually their savings dwindle and they decide, well, let’s make the car last two more years before we buy a new one. And Junior can get by with his current laptop for another year, we don’t absolutely have to have a new dishwasher yet, and the roof will have to wait awhile to be re-shingled. If this is the situation to the entire middle class, then boom, suddenly you have two quarters when major purchases plunge. Or several quarters, if we remain in stagflation.
You’ve convinced me that the Fed has been pursuing a flawed strategy, and I have little confidence they will change. I remain concerned about our economic future - and that’s not even factoring in the national debt, creeping socialism, and trillions in derivatives!