Stocks Analysis by Ed Yardeni covering: . Read Ed Yardeni's latest article on Investing.com
Some of our best friends are permabears. They are smart economists and strategists who tend to be bearish. We look to them for a thorough analysis of what could go wrong for the economy and the stock market. They are very vocal and fuel lots of pessimism about the future among the financial press and the public.
In the post-World War II period, from 1945 to 2023, the average recession lasted about 10 months. Since 1945, there have been 12 recessions that occurred during just 13% of that time span. Meanwhile, the permabears have also been ringing the alarm bell about the personal saving rate lately. It had dropped to 3.3% during Q2-2024, according to the previous estimate, the lowest since Q3-2022. One permabear wrote on September 25 that “history suggests when the SR sinks this low, it usually proves unsustainable with a subsequent rise triggering a recession.
The statistical discrepancy between the two measures of the economy is tiny now. In current dollars, it was revised down to 0.3% from 2.7% during Q2. As a result of the latest benchmark revisions, Q2’s real GDP and real GDI are 1.3% and 3.8% greater than previously estimated. There’s no hard or soft landing in the revisions. The economy is still flying high, as it has been since the two-month pandemic recession during March and April 2020!The answer is that Congress told the Fed to ease by mandating that monetary policy must aim to keep both the inflation and the unemployment rates low.
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