Consumer

Two Too-Hot No-Landing Indicators Hit Markets

Feb 24, 2023 2 min read

The stock and bond markets reacted badly to today's stronger-than-expected personal income data and hotter-than-expected PCED. Is the economy experiencing an inflationary no-landing scenario? If so, Fed officials might conclude that the only way to bring inflation down is to push interest rates up until they cause a hard landing. More likely in our opinion is that these two indicators along with January's other economic stats

Ed Yardeni

The Economic Week Ahead, Feb. 21-24

Feb 20, 2023 2 min read

The holiday-shortened week is a light one for economic indicators. The BIG number will be January's PCED inflation rate, which will be released along with personal income on Friday. The month's CPI was higher than expected , though the y/y inflation rate continued to disinflate. The PCED inflation rate tends to be lower than the CPI inflation rate (chart). That's because rent of shelter

Ed Yardeni

Born To Shop & Fly

Feb 15, 2023 1 min read

We aren't that surprised by the 3.0% m/m jump in retail sales reported today. When January's employment data were released, we calculated our Earned Income Proxy for private wages and salaries in personal income (chart). It soared 1.5% m/m as the average workweek jumped 0.9%, payrolls increased 0.3%, and average hourly earnings rose 0.3%. American consumers are doing what

Ed Yardeni

The Economic Week Ahead, Feb. 6 - 10

Feb 5, 2023 2 min read paid

The FOMC's blackout period ended on Friday. So we can look forward to lots of chatter from the Fed heads until the start of the next period on March 11. They are likely to parrot Fed Chair Jerome Powell's moderately less hawkish outlook for monetary policy, as he explained it at his presser last Wednesday: Inflation is moderating for goods, but not yet for services. So

Ed Yardeni

US Consumers Depress Stock Investors

Jan 18, 2023 2 min read paid

Bond prices rallied and stock prices fell on renewed worries about a consumer-led recession following the release this morning of December's retail sales and industrial production. Both declined last month. Yesterday, the NY Fed's regional business survey for January was also very weak. (We will review it tomorrow along with the Philly Fed's latest regional business survey.) Let's have a closer look

Ed Yardeni

The Economic Week Ahead, January 17-20

Jan 16, 2023 2 min read paid

We expect that more of the Fed's talking heads will be talking this week about monetary policy perhaps with a bit less agreement of what needs to be done next. They only have three days to do so before the FOMC blackout period begins. The Q4-2022 earnings reporting season continues this week. More important than the quarter's results will be managements' guidance for this year.

Ed Yardeni

Is The Service-Providing Economy Cooling Off?

Jan 9, 2023 2 min read paid

Consumers have cut back on spending on goods because they went on a goods-buying binge on them during 2020 and 2021, when many services businesses were either closed or limited by social distancing restrictions. During 2022, they pivoted to spending less at retailers and more at services providers as they reopened (chart). Consumers tend to determine the pace of economic activity. In a soft-landing scenario, they should continue to spend

Ed Yardeni

The No-Landing Scenario

Dec 23, 2022 2 min read paid

Ed Yardeni

Fork In The Road

Dec 7, 2022 1 min read paid

It was another day of recession jitters in the stock market as the CEOs of Bank of America and Wells Fargo reported that they are seeing slowing consumer spending and borrowing. That may be so, but there wasn't any evidence of a slowdown in October's consumer credit data released by the Fed today. Total consumer credit rose $27.1 billion in October, up from a revised

Ed Yardeni

Soft Landing

Dec 1, 2022 2 min read

The bears disparaged yesterday's stock market rally claiming that Fed Chair Jerome Powell's speech at the Brookings Institution was hawkish and didn't justify the market's bullish spin. We believe that the bulls correctly perceive that inflation peaked this summer and were relieved to hear Powell say that the Fed might be willing to let inflation subside without pushing the economy into a

Ed Yardeni

Consumers Aren't In the Mood for a Recession

Nov 16, 2022 1 min read paid

The Atlanta Fed's GDPNow model estimate for real GDP growth during Q4 is 4.4% today, up from 4.0% on November 9. After this morning’s retail sales report showed a solid 1.3% October gain, the nowcast of Q4 real personal consumption expenditures growth increased from 4.2% to 4.8%.

Ed Yardeni

What Is The Stock Market Discounting Today?

Oct 28, 2022 1 min read paid

The stock market is ripping this morning despite disappointing earnings reported by some of the S&P 500's MegaCaps this week. Why? Consider the following: (1) Today's inflation reports (for the ECI and PCED) suggest that it is peaking, though not for sure. (2) Inflation-adjusted consumer spending continues to move higher albeit slowly and led by services as spending on goods has flattened in recent

Ed Yardeni

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