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Spend It If You Got It!
Surprise! Americans are still spending. Or at least they were last month.
A key underlying retail sales aggregate which helps inform US GDP estimates overshot by a country mile in data released Thursday.
The only people actually surprised by the scorching-hot 0.7% control group print were economists, whose penchant for missing (or ignoring) the writing on the proverbial wall never ceases to amaze. Consensus was 0.3%. 0.7%, the actual reading, was among the best of the year and should bias Q3 G
Waiting for the rhetoric to change next week. Fedspeak has been fairly open minded to a “skip” (Bostic,Waller,Daly,Boweman), but the market doesn’t believe it. Really only matters what Powell thinks since the Committee is most likely split. Of course we can see blackout articles from Colby and Nicky T too. J loves to keep us on our toes. Worth noting Kaplan on CNBC yesterday said he thinks the fed will cut 25 in November and debate December. Makes no sense to me but he called for the 50 last time around.
“at least for Americans fortunate enough to have some wealth” – according to this article, only 24M Americans had more than $1M of wealth in 2022. So maybe the Fed isn’t concerned about the stock market being inflated, if lower interest rates help the vast majority of Americans.
https://www.msn.com/en-us/money/news/guess-what-percent-of-households-have-over-1-million-you-might-be-shocked-by-the-number-of-millionaires/ar-AA1sg3aT
And the article specified “net worth”, which is all “owned” assets minus “owed” liabilities. We’re not talking about money in an account here. If you have a house (paying down) and a couple of nice cars and a boat or perhaps a vacation home then you may actually have very little “money” to throw around, especially if a lot of the wealth you do have in accounts is tied up in an IRA or 401(k) and you are less than 60 years old. There are a lot of Millionaires on paper that aren’t feeling it, I assure you (I’m one of them).
I used to testify as an expert witness “helping” the court divide assets in divorce cases. It was, I admit, both interesting and profitable work. Many of the cases could be easily described through the situation you list in your post. Several of the male defendants actually cried when confronted with the amount of cash they would be required to donate to their wives to cover the lady’s part of her husband’s future pension. Virtually all these guys had spent all the family money on their houses and toys and were left with about ten bucks of liquidity. I chuckled every time.
That sounds like an interesting line of work. How did you get in to that? And how long did the men have to come up with the cash? It seems to me, the men could be placed into some hardship if the value of assets reflected market values rather than the value they’d get in a fire sale.
Helene/Milton may be distorting some data now. E.g. Florida initial claims down by about a third, week-over-week, in the Oct 12 week.
Other data seems more neutral than strong. E.g. 0% real growth in retail sales.