The latest Atlanta Fed GDPNow and New York Fed Nowcast were little changed on economic news this week.
The Nowcast was steady at 2.0%.
The GDPNow base forecast and real final sales forecast slipped to 1.7% on October 9 from 1.8% on October 4 following wholesale trade report from the U.S. Census Bureau.
These are muddle through, not recessionary numbers.
Mike “Mish” Shedlock
1.7 % GDPNow growth, minus 2% inflation, gives -0.3%. Oh my bad, GDP is always adjusted to the magic inflation number to show perpetual growth.
The present economic situation reminds me of that Keanu Reeves movie ‘Speed’ about a schoolbus with a bomb on it that will go off when it slows down. Our economic bus drives on cheap debt which is not a endlessly renewable form of energy, so unless a miracle happens the bomb will go off at one point, no doubt about it !
Yep.
Credit to the unworthy continues to flow … eventually delinquencies will scoot higher … credit faucet tightens … All She Wrote.
‘Credit to the unworthy’…..bravo…I’m keeping that one in mind 😉
Is that the same as the unwashed, deadbeats? After a decade of being violated by ZIRP, I feel like one.
I actually think balance sheets of households are better than in 2007 when people were leveraged up their eyeballs in housing. I believe more people have diversified in multiple asset classes this time around which will help but wont prevent rates from going lower.
What multiple asset classes ? The all time high stock exchange casino or scalding hot all time high real estate ? Here in ‘prosperous’ Belgium, people in general are indeed better off than the state with its 105% debt and utterly insane future liabilities, I don t think Belgium stands alone in this unsustainable position, a serious recession today, unlike other economic downturns, would have never seen before consequences…..so let s keep ‘the bus’ running with ever cheaper debt…..
You guys have more problems in Europe. It is a demographic problem at its core.
So far the prediction of “slogflation” has been accurate. My expectation that declining growth rates, even in the absence of a recession, would precipitate a bear market, has not happened. To the extent that the proper PE is 1/growth rate, you’d expect that with little growth ahead, PEs would contract. On the other hand, with falling interest rates, to the extent that PEs should be 1/(Interest rate), then PEs can continue to rise. Right now those two forces are working in opposite directions with the result that the market has been largely moving sideways for the last year.
For now it appears that we will need to see actual signs of a recession to initiate a bear market, and that in the absence of that, continued slogflation will lead to a continuation of the sideways market.
Partially agree
Market bias is upwards until numbers decidedly recessionary … or Lehman moment.
Where a major institution (Deutsche Bank?) needs help … or something else big (China devaluation?).
I hazard the latter arrives first.
“These are muddle through, not recessionary numbers.”
…
I would liken it to the drunk stumble … on the edge of a 10 story building.
WHEN he finally goes head over heels … it will be a quick fall … then Splat.
Light switch moment.
Maybe for equities.not for the real economy. The decade of 1/1/1 is upon us. 1% growth, 1% rates and 1% inflation.
Virtually all growth now is in the public sector,and they’re borrowing $300 billion a month to drive that 1-2 % GDP “rate”,and an inflation/shrinkflation rate of 12% YOY,quick math,big govt will need to increase borrowing by roughly.wait for it….2 trillion every year to maintain that 1-2% GDP……..such is life living on a credit card!