Deteriorating Fundamentals vs. Rising Expectations

Scott Anderson
Chief Economist

Over the near-term, U.S. economic growth fundamentals look set to deteriorate. Yet U.S. stock prices remain close to record highs and long-term Treasury yields have moved up 10 to 15 basis points in the last week alone on prospects for sizable fiscal stimulus and a new Democratic administration. The markets are clearly trying to look past near-term signs of trouble, while focusing on a brighter 2021. 

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September Retail Sales Come Roaring Back

Scott Anderson
Chief Economist

Retail sales increased 1.9% in September, a far stronger pace than economists expected, given tens of millions of Americans remain out of work and supplemental unemployment benefits of $600 a week began to disappear at the end of July.

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Consumer Spending Rebound at a Crossroads

Scott Anderson
Chief Economist

In many ways the consumer is the U.S. economy.

Real consumer spending comprises about 70% of U.S. GDP, so if you can accurately forecast where the consumer is going, you have a pretty good idea the rest of the U.S. economy will follow. Personal consumption expenditures is a broad measure of consumer spending, including spending categories not included in the monthly retail sales reports like spending on services like health care and education.

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September Employment Lands Short of the Mark

Scott Anderson
Chief Economist

The September jobs reports brought more troubling signs that the labor market rebound that began in earnest in May as furloughed workers returned to work and peaked in June with a one month 4.78 million job gain is rapidly petering out as winter approaches.  

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