New Deal democrat’s Weekly Indicators: Simply Stellar Consumer Spending June 21 -June 27

Unsurprisingly, the most significant high frequency indicator of the week was the 10% YoY increase in consumer spending as measured by Redbook. Despite all of the chaos and own-goals emanating out of Washington, the economy is incredibly resilient. II continue to worry that nearly the only driving force is what looks like a Bubble in construction of AI mega-scale data centers.

• Economic nowcasting signals remain broadly positive across long leading, short leading, and coincident indicators, with little change week-over-week.

• Booming corporate profits and positive term spreads are the standout long leading positives, though the leverage index continues to worsen, historically signaling recession risk within 12 months.

• Short leading indicators are buoyed by strong stock prices, low jobless claims, and rebounding manufacturing and services data, while commodity prices are generally easing.

• Coincident indicators highlight robust consumer spending, with a simply stellar Redbook up 10% YoY, though tax withholding remains weak for the second consecutive week.