Commentary

January Stagflation

A key economic mistake people make is thinking growth leads inflation. One reason they do that is because inflation is a monetary phenomenon. When money is too easy, first growth rises, and then inflation rises with a longer lag due to excess dollars in the system.

Commentary

Labor Market Not Adding Up

On the surface, there’s much to like about the job market. But when you get into the details, it’s not quite as strong and some things don’t add up.

Commentary

May Day

Rate hikes are in the rearview mirror, now the issue is when the Federal Reserve starts to cut.

Commentary

A Stock Market Conundrum

The economy is still growing. Real GDP rose at a solid 3.3% annual rate in the fourth quarter, and consumer spending was strong in December meaning the first quarter is off to a good start.

Commentary

Slower Growth in Q4, But No Recession

The economy slowed substantially in the last quarter of 2023 from the rapid pace of the third quarter, but, as we explain below, still expanded at a moderate rate.

Commentary

Budgets And Governing

The leaders of the House and Senate have come up with a new budget deal, and many people aren’t happy. It still needs passing by January 19th, or else the government, evidently, may shutdown. We doubt that this will happen, but the fight over government spending seems to drag on year after year after year.

Commentary

The Employment Situation

The employment sector has undergone a tumultuous journey over the past four years, and recently the trajectory of job gains has experienced a gradual deceleration over the past year, prompting speculation about the future.

Commentary

Low Quality Growth

Last Friday’s jobs report showed nonfarm payrolls up 216,000 in December, beating the consensus expected 175,000. Many are arguing that this was a huge number proving that the economy is not going into recession.

Commentary

The Housing Outlook: 2024

Just because we still think the economy is headed for a recession, doesn’t mean we think the housing market is going to get killed.

Commentary

A Mild Recession and S&P 4,500

Very early this year our economics team got a pleasant surprise: Consensus Economics, which collects forecasts from roughly 200 economists around the world, rated us the most accurate forecasters of the United States for 2022, based on our forecasts for GDP and CPI. Unfortunately, we don’t expect a repeat award for 2023.

Commentary

Fed Declares Mission Accomplished

The Federal Reserve declared victory today, projecting a soft landing as its base case in the years ahead, with more cuts in short-term rates, and with inflation gradually getting back to its 2.0% goal without a recession.

Commentary

What Should the Fed Do? How About Nothing?

For the first time in roughly fifteen years, interest rates in the United States are about right. In economics, we call it the “neutral” or “natural” rate.

Commentary

S&P 500 Index

Widely regarded as a barometer for the overall stock market, the S&P 500 Index tracks the performance of 500 of the largest companies listed on U.S. stock exchanges.

Commentary

Disinflation, Not Deflation

New home prices are much lower than a year ago. The average price of a new home sold in October was 10.4% lower, while the median price was down 17.6%.

Commentary

Argentina: Is the Pendulum Swinging, Again?

When Argentina entered the 20th Century, its prospects looked bright. On a per person basis, its economy was on par with Canada and Sweden and about two-thirds of the United States.