I can’t think of a parallel era of economic cross-flow. There are plenty of reliable arguments on the basis of basic information: inflation, retail sales, NFP, JOLTs and NILF. It’s almost as if you’re not confused about the economy, then you’re probably not paying attention.
I wanted to briefly highlight an interesting chart courtesy Invictus I doubt that understanding the current state of the economy could explain some of the underlying confusion and challenges.
The chart above shows both products (The blue line) And services (Red line) Relating to total personal expenses. It is worth billions and shows the last 10 years (January 2012 = 100). If you want to play with the chart yourself, click on the image above and stick to it.
Think about it even in the light of the shortage of single-family home listings and the difficulty of finding new cars (or used cars at reasonable prices). And yet, we see improved product costs and reduced services. Note that the product peaks came long before the current rise in inflation.
If we zoom in, you can see how spending habits have changed since the epidemic:
Let’s look at it in a final context: percent of the cost of goods and services:
This is the last 5 years (10-year version is the same but changes are more difficult to see). As you can see, the economy is still about 5% below the pre-epidemic level of services and about 5% above the pre-epidemic level of products.
As offices reopen, people go on vacation and life begins to return to normal, we should see these lines begin to return to their former level. But I have strong reservations about If ever We are the title All behind Soon. There is a significant percentage of people who do not return to the office gig from 9 to 5, Monday to Friday, and wonder what that might mean for a balance of costs.
This is another of the many cross-currents that pose a challenge to understanding the current US economy …
The cap tip on the chart Invictus!
Are we in recession? (No) (June 1, 2022)
The-Normal Economy (January 7, 2022)
“Unprecedented” is the word for 2020 (December 6, 2020).