Indeed, how do you possibly justify the new Fed Chair’s claim that the Yellen Fed (and Bernanke too) did a splendid job of restoring full-employment prosperity, and that these policies need to be continued full speed ahead?Īs Powell said at his swearing-in ceremony: So with the household savings rate having now plunged to just 2.4%, which is virtually an all-time low, how do you get a consumer spending boom out of 0.3% annual wage growth?
As we mentioned a few days ago, hourly wage growth for the 80% of the work force considered to be “production and non-supervisory employees” was up just 2.4% in January while the CPI has now come in at 2.1%. Needless to say, the underlying trends do not remotely fit the goldilocks narrative anyway. So if consumers are the be-all and end-all of Keynesian prosperity, where’s the beef?Ĭertainly the measly 0.9% gain in real retail spending since January 2017 ain’t it. To wit, nominal retail sales in January were up just 3.0% on a Y/Y basis, while the CPI gained 2.1%. Indeed, even if you don’t cotton to the seasonally maladjusted monthly data prints, which we definitely do not, it’s hard to see the case for goldilocks even on a year over year basis. The robo machines certainly did when the Dow futures reversed by more than 400 points hard upon the 8:30 AM releases. Today, however, January’s in-coming data brought a 6.7% annualized CPI rate and a negative 3.1%annualized retail sales print. Two weeks ago the Goldilocks Economy was being feted (again) from one end of Wall Street to the other. By David Stockman as originally published on Contra Corner and reprinted here with permission
0 kommentar(er)
