‘Quite Literally At A Price’: Inflation Comes Roaring To Life In US PMIs
While you can expect high frequency indicators to start reflecting the various lockdown protocols instituted across the US, PMIs aren't yet showing the same signs of deceleration witnessed across the pond in Europe.
In fact, the November flash read on IHS Markit's gauge for the world's largest economy was blistering. The composite index printed 57.9, the best reading since March of 2015.
Services sector activity is all kinds of robust -- or so we're supposed to believe. The flash read on the s
but what of the weekly initial jobless claims numbers over 700k still? “scrambling for workers” ? maybe the definition of scrambling has changed to mean something more like: “searching for higher qualified employees at lower wages”.
lets see what spending does in january if there is no stimulus and we can debate if the economy is expanding or simply going through periods of stagflation, masked as periods of optimism for growth.
Referring to the Kocic quote:
My inflation thesis isn’t driven by an attachment to the Phillips Curve…I acknowledge there are big deflationary trends overall (innovation, wealth inequality are not talked about enough IMO), but to me the vaccine seems like such an inflationary catalyst for the next 1-2 years. Contrast this to say, GC, where there was no immediate catalyst. It was just a slow, clawing out of the hole.
It’s a gut feeling (important to acknowledge this), but I feel that as soon as people are vaccinated they are going to want to spend boatloads of money. And not just people…business will want to invest knowing the Pandemic is over. Companies will be eager to reallocate the cost savings from the Pandemic and layoffs. “Pent up demand” is how this cycle differentiates from the past ones, where inflation did not pick up as unemployment dropped. Now we have an inflationary driver…before we did not.
I think inflation really heats up once the holiday shopping season comes to a close.
Not to mention a Fed that is almost begging markets for inflation…the stage seems set
Or … this is just a temporary surge. Will Acer’s buying binge last or prove to be a quickly-passing flurry. Then what?
In the US, state and local governments are hamstrung and, thanks to Calvinist balanced budget laws, will be laying off large numbers of people. Unless the economic rebound is sustained, tax revenues will not recover strongly enough to reverse this.
We can see what will happen at the Federal level = zero.
It’s hard to say.
IT seems if a person wants an economy that rockets forward then the outcome of the Senate race is key. Democrats would likely go ahead with releiving at least some of the pain for state and local governments. This could add significantly to the upwards trajectory of the economy.