July 31

7/31 – News outlets can’t stop talking about the possibility of a “soft landing” - where economic growth is slowed just enough to reduce inflation back to acceptable (2.0-2.5%) levels without triggering a recession and significant job losses. The PCE (Personal Consumption Expenditures) price index, the Fed’s preferred inflation measure, was up just 3.0% in June from a year earlier, vs. 3.8% in May and a high of 7.0% a year ago. And U.S. Q2 GDP growth came in at 2.4%, almost double economists’ consensus forecasts. Market Vision has maintained that you can’t have a recession with unemployment under 4%, and that we shouldn’t start worrying until it gets above 5%. That said, there are still some big bumps in the road ahead that could make sectors of the economy “feel” recessionary. Consider that over 40M Americans will resume making student loan payments in October. That may take a big bite out of restaurant sales.