Has the U.S. Economy Dodged a Recession?
Lately it seems that all economic releases are coming up roses – even last month’s slightly negative GDP report was widely hailed as the best-looking contraction one would ever see. Similarly, many felt the latest employment report held green shoots for job growth, despite an uptick in the jobless rate and weaker-than-expected payroll job growth. A higher-than-expected PMI number further cheered the consensus, who saw in it signs of an increasingly upbeat industrial growth outlook. Indeed, it seems that all news, good or bad, becomes good news.
Encouraged by this apparent improvement in the economic data coupled with the Fed’s promises to keep monetary policy extraordinarily accommodative for years to come, the stock market has soared recently. Under the circumstances, a key question is whether the U.S. economy is genuinely getting better, or whether the stock market, buoyed by Fed money-printing, has decoupled from economic reality.
ECRI’s latest cyclical analysis of recent economic data clearly answers that question, revealing the implications of the recent economic data releases.