In all years we’re been at this, we’ve rarely seen as confused a bunch of observers as we had last week.
Headline Jan Durables tanked on Tuesday but a moment later we found Feb consumer confidence was at a 1 yr high; Q4 GDP (R) was a tad better on Wed and the Chicago NAPM and Rich Fed manuf survey flattened expectations that day, then Claims continue to cheer on Thursday, but then Jan Personal Income and Spending went nowhere, and the national NAPM fell inside of expectations. Then we found that vehicles sales in Feb were at their highest level in nearly 4 years (making a large contribution to Q1 GDP). And merchants reporting their sales reported gains that exceeded St estimates. "This was a very strong month. A new life has been breathed into the retailers," said Ken Perkins, president of Retail Metrics, a research firm. "Consumers are starting to feel much better about their overall situation."
My goodness, what is an economist to think? It’s so easy after all to look for a repeat of last year; if it’s one thing economists like, it’s precedence (which is why most get into a whole lot of trouble).
Best is not to think, at least not too much. Getting all tied up in knots does no good. For those who can relax, and back away and in so doing gain perspective, it is those who will be gifted with ownership of the economic landscape just ahead. This process cannot be forced, but will come naturally for those who do not resist (in the fashion of the Tao).
Next, voting members of the FOMC this week continue to back away from the scenario of FF’s in the cellar into 2014, except that is, Bernanke who just Wed made the case for an accommodative stance; not just now, but likely later. He probably knows that won’t happen, but it’s cheerleading and the Fed loves to put on that skirt and grab the pompons.
Robert Craven
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