Reality settling in
Looks like the Fed is finally understanding that they are behind the curve and not able to catch up to the curve without triggering an economic contraction. Now we will see how long the business cycle can hold on.
I still see an economic contraction starting by 2nd quarter 2017. Still a 70% chance by end of 2016 as I predicted back at the start of January. The only difference now is that reality is settling in more at the Fed and market participants.
Edward:
Maybe link to your post making the prediction?
Run,
The link to the post is… (September 2013)
http://effectivedemand.typepad.com/ed/2013/09/an-effective-demand-look-at-the-1980-recession-to-envision-the-next-recession.html
I wrote…
“If real GDP keeps growing at around $100 billion per quarter as it did in 2nd quarter 2013, real GDP will enter the LRAS zone in mid 2014.”
The projection held…
Sorry, but it looks like MEW is accelerating consumer spending in the 2nd quarter(I suspect it will show up in figures in the 2nd half of the year, there is a lag in data). All bets are off. When FIRE accelerates, you can get blindsided.
That latest jobs report was pretty horrible. Put some fear into the Fed, I guess.
What if that reverses though or is revised up. Bad months happen. Big months happen. . Let note, both April and May lost 37,000 jobs from the Verizon strike. Will they revise them back in the next month or those months to balance things?
There have been “horrible” jobs reports in the past that completely reverse. Consumer spending simply isn’t weakening. The 4th/1st quarter decline has been reversed.
The latest job report doesn’t cut it. It isn’t always truthful.
Here is the one on AB to link to in your post: http://angrybearblog.strategydemo.com/2013/09/an-effective-demand-look-at-the-1980-recession-to-envision-the-next-recession.html
“The latest job report doesn’t cut it. It isn’t always truthful.”
Quite true. The loss of 500k full-time jobs is hard to swallow. I hope it was just an erroneous report.
Err, Warren, 500,000 full time jobs weren’t lost. Please stop posting nonsense.
The BLS does one week survey’s and that is it. I was a poorly sampled report as was April. They also multiplied the telecom “losses” which weren’t even on “furlough”.
As I said, Bert, I do hope that is the case. The Household Survey did report over 500k full-time jobs lost. That is not nonsense. I look forward to seeing those numbers revised in future reports.