Productivity growth is one the critical economic variables for investors to watch. For the economy as a whole, it is a key driver of GDP growth, and therefore of broad earnings growth. But within particular sectors and industries, and within particular companies, it drives margin improvements in a way that Read more
Joseph Carson, former chief economist of AllianceBernstein, recently observed on his blog: “CPI inflation of 2021 is not as high as that of the 1970s—False. It’s not possible to only compare inflation numbers across several decades because of significant changes in measurement. The CPI of the 1970s included house price Read more
Although the market averages are not far from all-time highs, the market’s tone leaves something to be desired. In part this is due to the narrowing of market performance to a handful of the old mega-cap pandemic winners, as the recovery theme has paled before poor seasonals, the Delta variant, Read more
Last week, the European Central Bank joined the U.S. Federal Reserve in moving toward a policy regime that’s more tolerant of inflation. Rather than a 2% ceiling, the ECB will now target an average rate of 2%, tolerating overshoots to compensate for periods of lower inflation. (The Fed’s move to Read more
All-item consumer prices rose 0.9% in June, and 5.4% in the 12-month period, the Bureau of Labor Statistics announced on Tuesday, capping a string of high monthly readings: Final data are not yet in on all the components tracked by our in-house real-world inflation gauge, the Guild Basic Needs Index. Read more
Any time markets recover from panic lows and recession, there is a powerful upward movement that is eventually followed by a period of digestion. It may come as a surprise to watchers of the broad indices to hear us say that the U.S. stock market has been in such a Read more
Unexpectedly poor job numbers for April caused a moment of consternation that the economic recovery was stalling. May and June’s reports were also misses, coming in below analyst estimates, although less sharply than for April. The concern served to highlight a topic of enduring interest for us — new business Read more
Tightening By Any Other Name Two weeks ago, we observed that peak liquidity growth had already passed: “There is an important sense in which the taper already began in the first quarter. The Fed may not be withdrawing liquidity from the system, but the rate at which liquidity is increasing (that is, the ‘second Read more
The extraordinary pandemic support measures enacted last year by the Federal Reserve and the Treasury were a critical component of the U.S.’ so-far successful navigation of pandemic disruption. Still, those support measures would have had little to work with if the U.S. economy had not already undergone substantial digitization in Read more
As many states have now ended the additional pandemic unemployment benefits provided by the Federal government, we are seeing in real time that those benefits were in fact serving to suppress employment and encourage workers to stay home; unemployment is falling faster there than in states that have maintained the Read more
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