‘Off The Grid’ Economic Indicators Suggest Current Expansion "Has Run Out Of Gas"
By Tyler Durden
Via ConvergEx's Nicholas Colas,
This last Morning Markets Briefing of 2016 is our quarterly look at “Off the Grid” economic indicators.
Out key takeaway: the U.S. economy is still growing but in the late stages of the current cycle. Workers are quitting their jobs like it’s the peak of labor market cycle. Also, consumers register confidence more typical of peaks than troughs for this measure. Full sized pickup truck sales are running in line with prior periods of high demand. Used car prices are stable, but have not increased in 5 years. Food stamp enrollment hasn’t declined since May 2016. Gallup’s take on consumers’ daily cash spend is modestly higher than last year, but largely in line with the average of the last 3 years.
Bottom line: this data explains why markets are so enthusiastic about the novelty of Trump presidency, for the current expansion feels very much like it is out of gas.
“After all, the chief business of the American people is business.” That quote is not from President-Elect Donald Trump, but rather former President Calvin Coolidge. It is certainly his best known public statement and still cited to this day, a rare acknowledgment of a man whose nickname was “Silent Cal”.
Given that U.S. equity markets have rallied since Election Day on the hopes that Donald Trump will channel Coolidge’s sentiment (if not his moniker), let’s take a quick look at the origins and background of this hallmark observation and how some interpret it today:
It comes from a 1925 speech to the American Society of Newspaper Editors in Washington DC. Unlike now, however, the newspaper business of that day was extremely profitable. Coolidge opined that such commercial success contributes to the quality of the news industry, because “a press which maintains an intimate touch with the business currents of the nation is likely to be more reliable than it would be if it were a stranger to these influences.” That, in fact, is the line right before “After all, the chief business…”
You can read the entire speech here (and see that politicians used to speak quite eloquently)
Business conditions in 1920s America were generally very good. Real GDP growth from 1922 – 1926 (the period around Coolidge’s speech) averaged 4.5%. Income taxes fell throughout the decade, having peaked at the end of World War I. Radio set production (the smartphones of their day) went from zero in 1922 to 40 million in 1929. The percent of US households with electricity went from 34% in 1920 to close to 70% by the end of the decade.
If you are thinking “Sure, but then you had the 1929 stock market crash”, here’s a great piece with a lot of historical data that shows the growth of the 1920s had little to do with the Crash (speculative securities lending leading to overvaluation was more to blame)
In the June 2013 edition of the Harvard …read more
Source: ‘Off The Grid’ Economic Indicators Suggest Current Expansion "Has Run Out Of Gas"
100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps
Looking for something special ? Find The Lowest Price HERE Posted December 22nd, 2016 in Uncategorized.
