Economy Strengthening?

We keep hearing, particularly from the Federal Reserve and those in DC, that the economy is improving. Hmmm, let’s look. With consumer spending responsible for roughly 70% of the economy, how about retail sales?


Ok, so maybe not there. How about employment? We keep hearing about how strong employment has become.

The percent of working-age people who are actually employed is back where it was over 30 years ago. That doesn’t look like a recovery to me.

What about new jobs? The level of job openings looks to be rolling over as well.

As for inflation concerns?



Not so much there.

But then it is tough to get inflation going when we have a heck of a lot more productive capacity than we need!

As for industrial production, that peaked way back in 2014.

As for that painfully weak GDP growth, if we strip out healthcare costs which have been on the rise as a percent of household spending in recent years, we get an economy that is nearing stall speed.



Bottom Line: The data is not painting a clear picture of an economy that is strengthening, but rather one that is rolling over, having never achieved even the typical average rate of growth. Keep this in mind when looking at equity markets sporting historically rich valuations.

About the Author

Lenore Hawkins, Chief Macro Strategist
Lenore Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, strategic planning, risk management, asset valuation and operations optimization, her focus is primarily on macroeconomic influences and identification of those long-term themes that create investing headwinds or tailwinds.

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