Recession warnings are looking flat wrong as consumers power the economy forward

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FastLane

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Recession warnings are looking flat wrong as consumers power the economy forward​


For all the sense of angst about the U.S. economy of late, the American consumer continues powering growth forward.

  • New data out this morning confirms that trajectory continued through late summer.
Why it matters: All those recession warnings from earlier in the year are looking flat wrong. When consumers keep spending (which they are) and businesses keep investing (which they also are), the economy can't — almost as a matter of arithmetic — fall into a contraction.

Driving the news: Personal consumption expenditures rose 0.6% in August, the Commerce Department said this morning, or 0.4% adjusted for inflation.

  • The spending bump was particularly strong for physical items, with a 0.8% rise in both durable and nondurable goods.
  • Personal income rose as well, though only by 0.4%, meaning that the higher spending was fueled by a lower savings rate.
By the numbers: The Atlanta Fed's GDPNow model sees a blockbuster 3.9% rate of GDP growth for the third quarter, which ends next week.

  • It follows on the heels of revisions to second quarter GDP, released yesterday, that showed much stronger consumer spending in the April through June quarter than first estimated, and a 3.8% pace of growth.
What they're saying: "After they hunkered down in the spring, recent data show consumers resumed spending over the summer, especially those with higher incomes," said Richmond Fed president Tom Barkin in a speech this morning at the Peterson Institute for International Economics.

  • "And why wouldn't they?" Barkin continued. "Unemployment is still low, nominal wages are still increasing, and asset valuations are near all-time highs."
The intrigue: Consumer sentiment measures have been depressed lately, especially among lower-income groups. The labor market is showing meaningful cracks, particularly in the pace of job creation.

  • As our colleague Emily Peck has reported, there is a range of evidence indicating that it is affluent Americans propping up spending, even as lower-income people are pinching pennies more.

  • Those low-income groups are less likely to have rising wealth thanks to the booming stock market, and more likely to be financially stressed by tariff-fueled inflation.
  • Confirming the bad vibes, the University of Michigan consumer sentiment survey for September, out this morning, fell 5% from August and is down 21.6% from a year ago.
Yes, but: The overall economy — which is a story of averages and aggregates rather than how things feel, or how different segments of the population are doing — looks just fine.

The bottom line: "The economy has continued to surprise to the upside, and despite the negativity captured in surveys and expressed by commentators, actions speak louder than words and consumers continue to spend," writes Chris Zaccarelli, chief investment officer for Northlight Asset Managemen....

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Oil production is higher than it has ever been. Gasoline was $2.46 at Sam's yesterday. Business investment is up. So all the nay sayers are proving to be wrong.. Maybe coffee prices will be going down next.....:laugh:
 
But the other shoe has not dropped yet.

Yes, things are looking better fiscally, but the Biden-RoboPen spent $19T in just four years... so soon we have to start paying the interest on all that borrowed money.

So Taxes for the Common Working American are going to go through the roof.

We might be able to pull some of that money, stuff sent to graft and corruption accounts of USAID, for example, back, and put it back into the general fund, but that will only buffer the budget for a few years.

They stole $19T, that's an enormous sum! In time, we will feel the brunt of the RoboPen theft. Brace for Impact.

-
 
Kurmugeon said:
But the other shoe has not dropped yet.

Yes, things are looking better fiscally, but the Biden-RoboPen spent $19T in just four years... so soon we have to start paying the interest on all that borrowed money.

So Taxes for the Common Working American are going to go through the roof.

We might be able to pull some of that money, stuff sent to graft and corruption accounts of USAID, for example, back, and put it back into the general fund, but that will only buffer the budget for a few years.

They stole $19T, that's an enormous sum! In time, we will feel the brunt of the RoboPen theft. Brace for Impact.

-
Click to expand...
 
FastLane said:

Recession warnings are looking flat wrong as consumers power the economy forward​


For all the sense of angst about the U.S. economy of late, the American consumer continues powering growth forward.

  • New data out this morning confirms that trajectory continued through late summer.
Why it matters: All those recession warnings from earlier in the year are looking flat wrong. When consumers keep spending (which they are) and businesses keep investing (which they also are), the economy can't — almost as a matter of arithmetic — fall into a contraction.

Driving the news: Personal consumption expenditures rose 0.6% in August, the Commerce Department said this morning, or 0.4% adjusted for inflation.

  • The spending bump was particularly strong for physical items, with a 0.8% rise in both durable and nondurable goods.
  • Personal income rose as well, though only by 0.4%, meaning that the higher spending was fueled by a lower savings rate.
By the numbers: The Atlanta Fed's GDPNow model sees a blockbuster 3.9% rate of GDP growth for the third quarter, which ends next week.

  • It follows on the heels of revisions to second quarter GDP, released yesterday, that showed much stronger consumer spending in the April through June quarter than first estimated, and a 3.8% pace of growth.
What they're saying: "After they hunkered down in the spring, recent data show consumers resumed spending over the summer, especially those with higher incomes," said Richmond Fed president Tom Barkin in a speech this morning at the Peterson Institute for International Economics.

  • "And why wouldn't they?" Barkin continued. "Unemployment is still low, nominal wages are still increasing, and asset valuations are near all-time highs."
The intrigue: Consumer sentiment measures have been depressed lately, especially among lower-income groups. The labor market is showing meaningful cracks, particularly in the pace of job creation.

  • As our colleague Emily Peck has reported, there is a range of evidence indicating that it is affluent Americans propping up spending, even as lower-income people are pinching pennies more.

  • Those low-income groups are less likely to have rising wealth thanks to the booming stock market, and more likely to be financially stressed by tariff-fueled inflation.
  • Confirming the bad vibes, the University of Michigan consumer sentiment survey for September, out this morning, fell 5% from August and is down 21.6% from a year ago.
Yes, but: The overall economy — which is a story of averages and aggregates rather than how things feel, or how different segments of the population are doing — looks just fine.

The bottom line: "The economy has continued to surprise to the upside, and despite the negativity captured in surveys and expressed by commentators, actions speak louder than words and consumers continue to spend," writes Chris Zaccarelli, chief investment officer for Northlight Asset Managemen....

==================================================

Oil production is higher than it has ever been. Gasoline was $2.46 at Sam's yesterday. Business investment is up. So all the nay sayers are proving to be wrong.. Maybe coffee prices will be going down next.....:laugh:
Click to expand...
"Experts" wrong again...
 
FastLane said:

Recession warnings are looking flat wrong as consumers power the economy forward​


For all the sense of angst about the U.S. economy of late, the American consumer continues powering growth forward.

  • New data out this morning confirms that trajectory continued through late summer.
Why it matters: All those recession warnings from earlier in the year are looking flat wrong. When consumers keep spending (which they are) and businesses keep investing (which they also are), the economy can't — almost as a matter of arithmetic — fall into a contraction.

Driving the news: Personal consumption expenditures rose 0.6% in August, the Commerce Department said this morning, or 0.4% adjusted for inflation.

  • The spending bump was particularly strong for physical items, with a 0.8% rise in both durable and nondurable goods.
  • Personal income rose as well, though only by 0.4%, meaning that the higher spending was fueled by a lower savings rate.
By the numbers: The Atlanta Fed's GDPNow model sees a blockbuster 3.9% rate of GDP growth for the third quarter, which ends next week.

  • It follows on the heels of revisions to second quarter GDP, released yesterday, that showed much stronger consumer spending in the April through June quarter than first estimated, and a 3.8% pace of growth.
What they're saying: "After they hunkered down in the spring, recent data show consumers resumed spending over the summer, especially those with higher incomes," said Richmond Fed president Tom Barkin in a speech this morning at the Peterson Institute for International Economics.

  • "And why wouldn't they?" Barkin continued. "Unemployment is still low, nominal wages are still increasing, and asset valuations are near all-time highs."
The intrigue: Consumer sentiment measures have been depressed lately, especially among lower-income groups. The labor market is showing meaningful cracks, particularly in the pace of job creation.

  • As our colleague Emily Peck has reported, there is a range of evidence indicating that it is affluent Americans propping up spending, even as lower-income people are pinching pennies more.

  • Those low-income groups are less likely to have rising wealth thanks to the booming stock market, and more likely to be financially stressed by tariff-fueled inflation.
  • Confirming the bad vibes, the University of Michigan consumer sentiment survey for September, out this morning, fell 5% from August and is down 21.6% from a year ago.
Yes, but: The overall economy — which is a story of averages and aggregates rather than how things feel, or how different segments of the population are doing — looks just fine.

The bottom line: "The economy has continued to surprise to the upside, and despite the negativity captured in surveys and expressed by commentators, actions speak louder than words and consumers continue to spend," writes Chris Zaccarelli, chief investment officer for Northlight Asset Managemen....

==================================================

Oil production is higher than it has ever been. Gasoline was $2.46 at Sam's yesterday. Business investment is up. So all the nay sayers are proving to be wrong.. Maybe coffee prices will be going down next.....:laugh:
Click to expand...
The number's from the tRump administration are not to be trusted.
 
The job situation is not good and is getting worse, the housing market is in crisis, it looks like the auto market is headed in that direction, airlines are warning of large capacity cuts, debt levels are rising.

Things are far from fine.

The government lies.
 
BartenderElite said:
It's beneath the office. And it's divisive, at a time when we need someone to help bring the nation together (he ain't that guy, and he'll never be that guy).
Click to expand...
The people who run America have worked for three decades at least to keep the people fighting and distracted, as they advance their plunder.

And stupid too.....this is not going to change anytime soon.
 
Hawkeye10 said:
The job situation is not good and is getting worse, the housing market is in crisis, it looks like the auto market is headed in that direction, airlines are warning of large capacity cuts, debt levels are rising.

Things are far from fine.

The government lies.
Click to expand...
And NOT all Trump's tariffs have worked their way through the supply chain thanks to big retailers buying up and storing a lot of goods before the tariffs went into effect,
Walmart is saying they will be raising their prices on a lot of thing very soon.
We will have to see what happens to the economy in a month or two.
 
Tbird19482 said:
And NOT all Trump's tariffs have worked their way through the supply chain thanks to big retailers buying up and storing a lot of goods before the tariffs went into effect,
Walmart is saying they will be raising their prices on a lot of thing very soon.
We will have to see what happens to the economy in a month or two.
Click to expand...
This is true.....and the governments inflation numbers have long been BullShit.....Americans have been suffering from a cost of living crisis for several years now and it is picking up steam even before the Recession/Depression gets here.

Except for the wealthy our lives will continue to get smaller.
 
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