Issue 42 – The Fog Is Lifting: Growth Will Pick Up and Inflation Will Roll Over This Winter

A Snapshot of the Market for the Week Ended October 29, 2021:

In the quarter ended September, the R-GDP rose at an annual rate of 2.0%, while the GDP-deflator rose 5.7%. Except for the inflation rate, which is still out of whack, the pace of the real economy has essentially returned to normality. Investors should take note that the personal savings rate was 7.5% in September and this was where it was before the pandemic hit us. While these numbers reflect less than the forecasters were expecting, the performance would have been much better in both cases had the economy not been hampered by supply-chain bottlenecks and a resurgence of the pandemic. Inflation upset growth. The sharp slowdown in consumer spending to an annual rate of 1.6% reflected weakness in expenditures on long-lasting durable goods, the availability of which was limited by supply issues. Spending on durables fell more than 25%. The headline print was short of consensus, but it was significantly above the Atlanta Fed’s NowCasting estimate of 0.2%.


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By Hubert Marleau

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By Hubert Marleau