Locator: 45888ECON.
Comment: it gets tedious listening to all these "talking heads" going back and forth on "recession" or not. From my perspective, it will be what it will be. Not much you can do about it; have a plan, stick to it, and modify your plan as conditions change, facts change.
But it's hard to ignore these articles, at least not post some of them for the archives.
With regard to Yardeni below, one could argue that he's seeing the same "car sales numbers" we're all seeing, but his comments / that story came out on June 22, 2023, well before car sales data. But, if nothing else, it seems the car sales data strengthens Yardeni's argument.
Before getting to Yardeni, first, other headlines, background:
G7: reported earlier today that all but Great Britain, among the G7 nations, are seeing a fall in inflation. Link here.
Great Britain: huge, huge problem with inflation, but may avoid recession.
US household "savings" collapsing: "area under the curve" ... graph. Link here.
By the way, I have not seen the definition of "personal savings" as used in chart above.
************************
Ed Yardeni
Archived. CNBC says this article was published "an hour ago, 7:54 p.m. July 4, 2023. In fact, the exact story, minus some inconsequential editing, was actually published in another source on June 22. Archived.
One hour ago, CNBC Pro, paywall:
The U.S. economy has shifted from a “rolling recession” to a “rolling recovery,” according to market veteran Ed Yardeni.
Since March of last year, the Federal Reserve has raised the federal funds rate by five percentage points and is likely to increase it by another 50 basis points by the end of this year.
Despite this monetary tightening, the U.S. economy has not fallen into a recession. Instead, it has experienced what the head of Yardeni Research calls a “rolling recession” — various industries being hit at different times since early last year.
This was already noticeable in housing as it “is always the sector to be hit hardest by rising interest rates,” Yardeni said. Goods and manufacturing are other sectors already feeling the pain, he added.
..........
However, Yardeni suggested that these hard-hit sectors were now seeing the first signs of recovery.
For example, large parts of the residential real-estate sector had been in a recession for the past eight quarters. But according to Yardeni, a sharp rise in new home sales and single-family housing starts by 12% and 19%, respectively, in May marked the start of the recovery.
.................The bullish investor also dismissed concerns about a recession caused by a downturn in commercial real estate.
The sector is undergoing a painful adjustment to higher borrowing costs and lower occupancy rates due to the shift to remote working. That’s meant rising loan defaults as $1 trillion worth of debt gets refinanced this year as valuations fall.
“Clearly, there’s gonna be a recession in commercial real estate over the next year or two. But I don’t think that sector is big enough to take the economy down,” he said.
In addition, one unique factor influencing the U.S. economy is the large-scale fiscal stimulus, like the Inflation Reduction Act, implemented before an actual recession, according to Yardeni.
The economist thinks this massive spending on infrastructure and efforts to bring manufacturing back to the U.S. is counterbalancing other weaknesses, ultimately boosting the economy. [MAGA: if it quacks like a duck, walks like a duck, swims like a duck. A rose is a rose is a rose.]
When questioned about the strength of this recovery, Yardeni confirmed that he’d doubled his growth forecast for the second quarter. [It should be noted that the final reading for 1Q23 was 2%.]
“We’re raising our Q2 real GDP forecast from 1.0% to 2.0%, followed by 2.0% in Q3 and Q4. We now see a 75% chance of a soft landing (up from 70%) -- subject to change depending on what the Fed does, which depends on what inflation does," Yardeni told client in a note.
70% vs 75% -- oh give me a break.
And, " ... subject to change depending on what the Fed does, which depends on what inflation does."
Brilliant.
Nothing like solidly committing to commit to nothing solid. As in, you cant get cornered in a round house
ReplyDeleteIt's amazing he actually wrote that in a note to a client: " ... subject to change depending on what the Fed does, which depends on what inflation does."
ReplyDeleteAnd then, of course, "75% up from 70%."