GDP was 4.9% in 3q2023. rapid growth.
are you ready to concede the US economy wont be going into stagflation anytime soon.
Allan (not right all the time)
Concede what?
That was a World Bank projection.
I consider it a worthy one, but it’s not mine. You and others have been trying to back me into that for months and I have never taken the bait.
I think outright recession is more likely (although there is still so much helicopter money around any scenario is possible.)
btw
I also warned others off the stagflation scenario (here or elsewhere) noting that every recession begins with a brief period of stagflation, but it must last an extended period or it “does not count.”
Here is one example from October of last year
Slowly but surely, the wheels of Brandonomics continue to grind…
Key inflation measure rose in September
https://thehill.com/business/4278755-key-inflation-measure-falls-in-september/
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and flat in October.
3.2%.
Allan
Greedy corporations.
new estimate came out today. 4.9% is no more. 5.2% is the new estimate for 3q2023. stagflation indeed. world bank needs better forecasters.
Allan
It’s the little green arrow that bothers people.
It is pointing the wrong way.
Take a guess Why do you think GDP is “going up” but real personal incomes are going down?
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seems to me. ever since the COVID recession, real income has been very volatile .
Allan
GDP includes personal income PLUS other stuff like government spending and corporate spending. Normally the difference doesn’t matter. Normally GDP is “supposed to” trickle down into personal incomes.
- give a big subsidy to automakers for making EVS
- give a subsidy so rich Manhattanites don’t have tor drive 3blocks to charge their TESLA
. . . and the money is “supposed to” trickle down (What’s todays term for those tickle down subsidies? “Grow the economy from the Big-3 up and from rich Manhattanites out,” or something like that.)
Anyway normally there is only a small statistical discrepancy between GDP and GDI,
but in recent years that discrepancy has grown and is growing larger. (Notice below, GDI is now negative and has been negative for nearly a year.)
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.
.
It’s got the pocket-protector econ nerds scratching their heads, and is a pretty big deal right now in those circles. Meanwhile in the real world it means real incomes are not keeping pace with inflation (the green arrow below) and, if we really do have a 60-40 economy, the problem might be quite serious at the non-home-owning end of the spectrum.
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Certainly the use of temps has been volatile.
But it has now settled into a familiar pattern.
Likewise the U-1 unemployment rate has been volatile,
but volatility happens,
Volatility is not all that rare.
There is a discernable pattern to it.
Huh?
From the lnk:
A key inflation measure monitored by the Federal Reserve rose in September, according to data reported by the Commerce Department on Friday.
The “core” personal consumption expenditures (PCE) price index rose 0.3 percent in September, weighing in at a 3.7 percent annual rate, down from 3.9 percent in August.
…
It rose, but was down?
What am I missing?
The article is probably conflating ttm vs this month raised to the 12.
(Journalists are supposed to make this stuff more clear, not less.)
Here is the same data that is in the article.
Note the last bar (Sept 2023) shows a 0.3% m-o-m increase
and
that the last bar (Sept 2023) is bigger than the Aug 2023 bar
Going forward, if all 12 of the next 12 months go up at exactly the same rate it works out to a 3.7% annual core PCE inflation rate
.
.
.
.
However
Looking back, both Aug and Sept were low compared to the 12 months prior. Below shows the sum of ttm core PCE inflation.
I think I get that. but how could the annual be lower if the mom is higher?
Oh that’s a math question.
The answer is that in back half of 2022, core PCE was so high
that even though Sep 2023 core PCE was (a little bit) higher than it was in Aug 2023, that slight upward tick did not change the overall downward trend.
Since we moved forward one more month, the TTM average includes one-fewer month of the extraordinarily high numbers from 2022.
Got it. Thanks!
Does this belong here in this thread?
Spitznagel believes U.S. monetary policy since the Great Recession — including “artificially low interest rates" and "artificial liquidity in the economy” — has contributed to the “greatest bubble of human history.”
And that bubble is getting ready to pop.
The Wall Street bear highlighted the nation’s monumental mountain of debt as one of the big issues.
He explained: “Debts need to get paid or they end in default. And of course, the debt burden today is at a level that cannot be repaid. You can just look at total debt as a function of the economy; it’s never been greater.”
He said he doesn’t know when the nation’s epic credit bubble is going to burst, but he did predict: “We’re going to see very, very low interest rates again in the next year or two … when we see another crisis, that’s pretty much inevitable.”
According to Spitznagel, the Fed is in a position where it cannot let this credit bubble burst because if it does, “it will destroy the entire forest.”
Of course it belongs.
Right now, we are in the middle of “The Big Drawdown.”
America (including corporations and government) has never held more than 60% of its income in the bank, in money market funds etc…
Currently we are holding ~77%.
(COVID era programs)
- Not surprisingly, that 77% is dropping quickly.
- Only 2-3 years ago that number was 87%
- Almost 5% of the GDP (the entirety of GDP growth) is not money-earned-and-spent, it is money-drawn-down-from-savings.
Right now we are experiencing “The Big Drawdown.”
At issue here is how will it stop and what will that stop look like.
- The World Bank projected it would end in stagflation.
- The guy in your article is predicting “giant crash.”
- Both are reasonable guesses, but I think the most probable is "garden variety recession, with a big crash in tech stocks.
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I hope you sold off most of your inverse positions by now.
https://www.axios.com/2023/12/12/sp500-2023-gains-chart-price-stocks