It All ‘Points To Stagflation’: PMI Headlines Belie Somber Reality

It All ‘Points To Stagflation’: PMI Headlines Belie Somber Reality

The all-important US services sector held up in June, with caveats. On the heels of a lackluster read on factory activity, some worried this week's services PMI data would feed a recession narrative that's gathering adherents by the day. Those fears proved unfounded. Sort of. ISM services printed 55.3 for June, easily ahead of consensus, albeit the lowest since May of 2020 (figure below). Separately, the final read on S&P Global's services gauge for last month was revised noticeably hig
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5 thoughts on “It All ‘Points To Stagflation’: PMI Headlines Belie Somber Reality

  1. Thinking back to mid 2020 all the MMT pundits were claiming stagflation wouldnt materialize (ignoring the fact that demand would stay high while production dropped) and all the neolibs were claiming we were giving people too much money (ignoring that people couldnt reasonably go to work in a pandemic).

    If the political atmosphere wasn’t such a team sport there might be some interesting lessons for the future there, like focusing only on temporarily expanding SNAP/municipal grants/etc to keep inflation more sectorally constrained… although maybe that’s naive. The left also claimed we couldnt wait for any sort of restrictive program to wind up and should start the money helicopters asap, and the right probably would have let things burn before agreeing to any sort of plan that didn’t involve massive cash influxes for their donor base.

    I dunno, man. Everyone is just wrestling the state back and forth for individual benefit. Seems a little like we’re headed towards our own crisis of the third century.

  2. I went out to dinner with some old friends a few weeks ago. It was the first time I had eaten indoors at a restaurant since the start of Covid. (My wife and I have been very cautious because we regularly interact with elderly parents.) I was stunned to see the restaurant–which is normally bristling with activity–about ½ empty on a Friday evening. Service jobs are down, because demand for services are still down, because Covid is still affecting the way many people interact with the world, at least in part. For example, people still working from home don’t gather at the old watering hole on Friday after work the way they used to.

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