There will be disappointment just ahead.
We noted in an earlier post (Mar/5) that the weather provided camouflage. Think about it – the awful weather was not a secret; naturally it provided a brake and so the weather was factored into economists’ predictions. You just slot it in. Easy. Still, the consensus missed weakness by a long shot during this period. “Must be the weather,” was the typical response. No, this was not the weather. This was simply a miss of a genuine economic wilt, Dec, Jan, February, divorced from the weather. Hint: Private-service employment was weaker in each of the last 4 months than it was in the 9 months before that, yet these jobs are less impacted by bad weather than goods-producing jobs (goods-producing jobs added 25M in March, down from Feb).
Releases just ahead will conform to our view, and why not? The administration continues to provide hindrances to any real take off: Obamacare (see Apr/2 post), American corporate 35% marginal tax rate, higher minimum wage, EPA regulations; these and many more scare the pants off employers and risk takers alike.
Finally, we have a Fed which, after the high it received from its discretionary activity in ‘08 (some of which was needed) has now become thoroughly addicted to such behavior, refusing offers of rehab, let alone showing the courage to go cold turkey.
Robert Craven
We noted in an earlier post (Mar/5) that the weather provided camouflage. Think about it – the awful weather was not a secret; naturally it provided a brake and so the weather was factored into economists’ predictions. You just slot it in. Easy. Still, the consensus missed weakness by a long shot during this period. “Must be the weather,” was the typical response. No, this was not the weather. This was simply a miss of a genuine economic wilt, Dec, Jan, February, divorced from the weather. Hint: Private-service employment was weaker in each of the last 4 months than it was in the 9 months before that, yet these jobs are less impacted by bad weather than goods-producing jobs (goods-producing jobs added 25M in March, down from Feb).
Releases just ahead will conform to our view, and why not? The administration continues to provide hindrances to any real take off: Obamacare (see Apr/2 post), American corporate 35% marginal tax rate, higher minimum wage, EPA regulations; these and many more scare the pants off employers and risk takers alike.
Finally, we have a Fed which, after the high it received from its discretionary activity in ‘08 (some of which was needed) has now become thoroughly addicted to such behavior, refusing offers of rehab, let alone showing the courage to go cold turkey.
Robert Craven
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