After topping at 9.7% in early December, the Atlanta Fed GDPNow forecast forecast for the 4h Quarter of 2021 drifted lower then too a dive on the latest retail sales estimates.
Understanding the Numbers
5.0% is a seemingly good quarter but 2.0% is the economic stall rate.
Real Final Sales is the true bottom line number for the economy. The rest is inventory adjustment which nets too zero over time.
Inventory Build
Worse yet, a huge inventory build is underway despite falling sales. Much of this is Covid-shock.
Retail Sales Unexpectedly Flop in December
Merchants have supply chain disruptions and are ordering heavily.
But that comes despite the fact Retail Sales Unexpectedly Flop in December, Down 1.9 Percent.
It’s not how 2021 went that matters, but rather where we are headed. The economy is slowing just as the Fed is about to hike.
On December 15, 2021 I penned The Fed Expects 6 Rate Hikes By End of 2023 – I Don’t and You Shouldn’t Either
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Mish
Between wild inflation effects, crazy seasonal adjustments to the December sales data and the beginning of Omicron effects it’s really hard to say where we stand with respect to measuring the true output of the economy at this point.