US economy (Feb. 2025: Unemployment ticks up to 4.1)

[China]

Tariff threats and uncertainty could weigh on consumers, drag down US economy, gov't report suggests

Ongoing tariff threats from Washington and potentially sweeping government job cuts have darkened consumers’ mood and may be weighing on an otherwise mostly healthy economy.

Data released Friday showed that consumers slashed their spending by the most since February 2021, even as their incomes rose. On a positive note, inflation cooled, but President Donald Trump’s threats to impose large import taxes on Canada, Mexico, and China -- the United States’ top trading partners -- will likely push prices higher, economists say. Some companies are already planning to raise prices in response.

Americans cut their spending by 0.2% in January from the previous month, the Commerce Department said Friday, likely in part because of unseasonably cold weather. Yet the retreat may be hinting at more caution by consumers amid rising economic uncertainty.

“The roller coaster of news headlines emanating from Washington D.C. is likely going to push businesses to the sidelines for a time and even appears to be impacting consumers,” said Stephen Stanley, chief U.S. economist at Santander, in an email.

The reduction in consumer spending — coupled with a surge of imports in January, also reported Friday, as companies likely sought to front-run tariffs — led the Federal Reserve's Atlanta branch to project that the economy would shrink 1.5% at an annual rate in the January-March quarter, a sharp slowdown from the 2.3% growth in the final three months of last year.

Click on the link for the full article

[Emir of Schmoe]

[DCranon21]

Are you all ready for some major oooffffff




The entire gains from the S&P since November....

[SWIM]

Just remember all the stonk talk prior to Trump getting elected. I hope all those people loose their ass in the new Trump economy.

Last time Trump had 8 years of good stewardship of the economy to help him out… this time we are at the end of an economic cycle and he has chosen to go full-stupid with his economic policies.

[Corcaigh]

Are you all ready for some major oooffffff




The entire gains from the S&P since November....

Meanwhile International Stock Indices are well up this year and European defense manufacturer stock in particular are, in a manner of speaking, killing it in the past week or so.

[China]

Imagine thinking that a guy that bankrupted at least 6 businesses, had his company criminally convicted of fraud, found civilly liable for fraud to the tune of over $400 miillon, is going to be good for the economy and business. Wait, he has gotten a mineral deal; oh that fell through because he is a petulant child?

Fucking morons who support him.

[DCranon21]

Not sure how right he is, but one of Wall Street's biggest bear said we may already be in a recession and the S&P could drop down to 4200 points this year. That would be very bad if that is the case. Say good bye to folks 401Ks and other funds.

Wall Street’s biggest bear says the S&P 500 could drop to 4,200. Here’s his advice for right now.

Heading into 2025, most Wall Street strategists were predicting further gains after missing last year’s 23% advance for the S&P 500.

But there was lone Wall Street bear, BCA Research’s chief global strategist Peter Berezin, whose year-end S&P 500
SPX

-1.22%

target of 4,450 compared to the 6,500 average, and Oppenheimer’s 7,100 top.

MarketWatch caught up with Montreal-based Berezin who says a looming recession makes stocks a tough investment.

Their worst-case scenario implies a 4,200 bottom for the index this year, the strategist said. And that includes two assumptions: S&P 500 forward earnings multiples dropping to 17, from around 21 currently, and earnings estimates falling 10%.

“Given earnings are expected to grow by over 10% over the next 12 months, that would just leave earnings sort of flat from here,” he said.

“I think that driver will be a recession,” said Berezin. “Earnings and the economy are highly correlated, so it’s kind of hard to see one happening without the other.”

He sees a 50-50 chance the U.S. is already in a recession, and while that won’t be known for a while, “March could very well be the start date for this recession,” he said.

Berezin said his research house was among the few that boosted recession probabilities following the U.S. election. “We did so because we thought that Trump would be disruptive in some positive ways, but also very disruptive in some negative ways, most of which is trade.”

Berezin said he never went along with what seemed like post-election Wall Street consensus — that tariffs were just a negotiating tool. He was convinced Trump wanted tariffs because “he’s a protectionist at heart,” and needs the money because of the sizable budget deficit.

“I have to say I didn’t think it would happen that quickly, I didn’t think we would be at 25% tariffs on Canada and Mexico by early March…things have actually soured even more quickly than anticipated,” he said.

He said he turned negative on stocks in mid-2024, clearly too early, but isn’t a permabear, saying he was among the few who saw no recession risk for the U.S. economy in 2022 and was upbeat also in 2023.

And what’s Berezin’s advice for right now? “I think you should largely step away from stocks. I mean, if you need to be invested, then by all means, move your portfolio toward the more defensive sectors, such as consumer staples, healthcare, utilities, maybe to some extent,” he said.

Click the link to read the full article




If this is behind a paywall, take this URL, paste it in the 1st bar and go here to read it for free - https://archive.ph/

[mcsluggo]

here is an economic identity:


GDP == (the three line equal sign; is defined as; is a mathematical identity) == C + I + G + NX

C= consumption
I= investment
G= Government spending
NX= net exports.

again, this is a mathematical identity. there are no estimates, or feelings or biases involved. The concept has been around for about 500 years, and the current accepted accounting method has been largely established and accepted since Bretton Woods in 1940s, where the IMF (international monetary fund) was established--- The IMF calculates this (and other national income accounts statistics) and released the data (IFS- international financial statistics) every year, for every country in the world.


Elon Musk and his stoolies think the definition of GDP is "unfair" because it includes G directly in its calculation...

[PeterMP]

here is an economic identity:


GDP == (the three line equal sign; is defined as; is a mathematical identity) == C + I + G + NX

C= consumption
I= investment
G= Government spending
NX= net exports.

again, this is a mathematical identity. there are no estimates, or feelings or biases involved. The concept has been around for about 500 years, and the current accepted accounting method has been largely established and accepted since Bretton Woods in 1940s, where the IMF (international monetary fund) was established--- The IMF calculates this (and other national income accounts statistics) and released the data (IFS- international financial statistics) every year, for every country in the world.


Elon Musk and his stoolies think the definition of GDP is "unfair" because it includes G directly in its calculation...

To me this is like people that talk about unemployment not being a true measure of unemployment like only the U3 exist and we don't track broader measures of unemployment including the U6 and people unattached from the labor market. Generally, U3, U6 and other measures of unemployment correspond to one another and talking about the U3 is a good measure of what's going on.

I sort of get that they are worried that based on GDP we are going to in a recession because of the cuts to the government. But they (Trump, Musk, etc.) are in a good position to amplify other economic measures if we do.

This has been something some people have been pushing for a while. They've even given it a name. Gross Domestic Private Product or GDPP.

https://thedailyeconomy.org/article/tak ... 20spending).

The government doesn't regularly report it, but it can easily be calculated from government numbers. They could have the Fed start reporting the GDPP.

And government absolutely gives numbers telling how GDP is related to government spending.

https://fred.stlouisfed.org/series/FYON ... Product%20(FYONGDA188S,dollars%20to%20billions%20of%20dollars.

If they want to start talking about GDPP and pushing the idea of GDPP, they are in a good position to do so.

But if they think they can crash government spending in way that lowers GDP without GDPP going down also, I think they have another thing coming to them. It might not go down as much, but I suspect if GDP shows we are in a recession so is GDPP.

[PeterMP]

Jobs report is strong but a light up tick in unemployment to 4.1.

Inflation pretty steady at 2.5% and over the Feds goal of 2%.

Stock markets down.