Inflation Is Fading; So Is The Economy; But Jobs Will Grow

Inflation Is Fading; So Is The Economy; But Jobs Will Grow

Index of Consumer Sentiment The "inflation" story has now moved to page two, not because it isn't still the financial media's mantra, but the disaster of the Afghanistan exit has taken its place. We don't think it will make its way back to page 1. The reason: the burst of economic activity, for the Q1 and Q2 economic reopenings, and the rounds of helicopter money are now both in the rear-view mirror. Almost all the incoming data is on the soft side. While still on the high side, data from various Fed surveys show easing backlogs at U. S. businesses, falling delivery delays, and some softening in prices paid and received. This implies that inflation is ebbing, although for many businesses, supply-chain issues and associated price increases may remain well into 2022. A lot depends on the path of the pandemic. In addition, the voices of some deep economic thinkers are now gaining prominence. Lacy Hunt (Hoisington Investment Management) has compelling data implying that U. S. reliance on and build-up of debt, which now appears to be the only tool used by monetary and fiscal authorities, is actually the root of deflation. Chen Zhao (AlpineMacro) discovered strong correlations between real