The GDP numbers were no cause for concern. Consumer spending and business investment were up.
The market turned after hours on Thursday when Apple, and more significantly, Amazon reported. The Amazon report was particularly bad, and the very crowded megacap tech “safety” trade started to unwind, which we saw follow through, predictably, on Friday.
We are heading back to the 40 ema. The generals are usually the last to be shot in downturns, this one caused by the Fed’s tightening.
Comsumer confidence for April was down slightly from March. Not much confidence in business either, 21% said business conditions are "good," 22% say they are "bad." The remaining 57% asked, what is business? When asked about the next 6 months, the numbers are even worse, with a scant 18.1% saying conditions will improve. And only 17.4% think the job market will improve in the next 6 months. 22% think it will get worse, the rest say, "about the same."
But we all know Sleepy Joe is doing a jam-up, great job, baby!
April PMI Manufacturing index down to 55.4 when an increase from the March figure of 57.1 was expected.
April (ismworld.org)
More numbers that don't lie.
Personal income increased $107.2 billion (0.5 percent) in March, according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $89.7 billion (0.5 percent) and personal consumption expenditures (PCE) increased $185.0 billion (1.1 percent).
Real DPI decreased 0.4 percent in March and Real PCE increased 0.2 percent; goods decreased 0.5 percent and services increased 0.6 percent (tables 5 and 7). The PCE price index increased 0.9 percent. Excluding food and energy, the PCE price index increased 0.3 percent (table 9).
Personal Income and Outlays, March 2022 | U.S. Bureau of Economic Analysis (BEA)
First monthly trade deficit of over $100 billion ($109.8B) in U.S. history. The forecast was for $107 billion.
Robust imports push U.S. trade deficit to record high in March | Reuters
The old saying goes, "Everything that should be up is down, and everything that should be down is up."
With predictions of a recession why is the Fed raising interest rates? Shouldn't they be lowering rates to encourage economic activity?
Oh! it's because we have this nasty inflation crushing the economy right now...wow! good job Joe. Can't fix one mess without exasperating another mess.
The economy is too strong. That is why the Fed is trying to force a recession. The Fed is trying to cause the type of recession that, due to the tight labor market, will cause less impact to jobs as the typical recession.
The Fed doesn’t have a tool in its toolkit to address the problem with supply chains, their only tool is to change the cost of capital, thus squashing demand to match supply.
Surely you understand this.
Btw, Jerome Powell (the Fed chair Trump installed and Biden decided to re-up) said as much in his press conference today.