If recent economic headlines have been giving you whiplash, you’re not alone. The economy has been sending lots of mixed messages. Every few days, a new report appears to give a wildly different impression of where things stand — and whether Americans should be basking in the boomtimes or battening down the hatches.
In fact, both narratives could be right. There’s really good stuff happening in the economy, implying we’re probably not in recession yet; but there are also some extremely worrying signs, suggesting recession might be imminent.
So what to make of these confusing signals?
One possibility is that some of these trends will stop contradicting each other once more data come in and past numbers get revised.
The employment numbers, for instance, can be subject to huge revisions — especially around times of turning points in the economy. Not because anyone is cooking the books. It’s genuinely difficult to measure hiring patterns in real time, especially when more businesses than usual are shuttering or opening.
This is why markets are, again, freaking out. It’s also why there is a growing threat of recession in the next year. I don’t mean “recession” the way laypeople sometimes use the term, to mean “something feels bad in the economy.” I mean “recession” as economists define it: a significant contraction in economic activity spread across the economy, usually showing up in incomes, jobs, GDP and other key metrics.
As lousy as Americans feel about the economy now — when some metrics still look quite good! — the months ahead could feel a lot worse."
https://www.washingtonpost.com/opinions ... r-bad-yes/
Some of our posters believe in magic. It's goofy as hell, but true.
You never get perfect information, matter of fact, the bigger the decision, the worse the quality of information tends to be. Like in war, you have to guess the intent of the enemy, which is always problematic.
I think the Fed is doing what has been it's usual thing since Reagan, running the country for the benefit of the rentiers.. And if you don't know what a rentier is, it's long past time to learn. (Price of Inequality, your library can get you a copy)
I think that's a bad mistake, and I've done a number of threads explaining why. On top of Covid and war, the global economy is facing fundamental changes. This is new, which means economists that are driving with the rear view mirror are asking for trouble.