Incoming Economic Data Look Robust…It’s A Mirage

Incoming Economic Data Look Robust…It’s A Mirage

Share to Linkedin A restaurant displays a "Now Hiring" sign amid the coronavirus pandemic, on August 4, 2020 in ... [+] Arlington, Virginia. (Photo by Olivier DOULIERY / AFP) (Photo by OLIVIER DOULIERY/AFP via Getty Images) Incoming PPI data marked the initial volley of the oncoming "siege" of inflation data. Despite reopenings, state Initial Unemployment Claims spiked as March ended. Either the reopening lags are longer than we thought, or disincentives from overly generous benefit payments are at play. If recent history is any guide, only part (25%) of the stimulus cash will be spent on consumption, the remainder saved or used to reduce debt. Business, consumer and real estate loans have fallen recently. These are normally rising when the economy is "roaring." Slow vaccine rollouts outside the U. S. and U. K. are negatively impacting U. S. exports and world tourism and may delay the recovery promised by today's optimistic world GDP forecasts, which appear to already be priced into world financial markets. As we have forecast, the first sign of what will amount to an "inflation" scare appeared in March's Producer Price Index (PPI). It rose +1. 0% M/M, well above the +0. 5% consensus market view. That