Chart of the Week
The Philadelphia Federal Reserve publishes a monthly report with a real-time snapshot of all 50 states. The 3-month rate of change shows all states growing. In October 2022, the index showed only 44% of states expanding, which typically precede an economic downturn.
Despite calls for recession since mid-2022, there has not been a sustained decline in economic activity. The pain from experiencing the highest inflation in 40 years is the likely culprit for how households and businesses feel. The long and variable lag of interest rates affecting the economy may need more time. Still, housing and larger purchases continue to surprise on the upside, even with jobless claims increasing.
What We’re Reading
Why You Believe the Things You Do – Morgan Housel
What Can the CIA Teach Investors? – Behavioral Investment
Views From the Floor – Japan in the Sun Again After Years in the Shade – Man Institute
The World’s Empty Office Buildings Have Become a Debt Time Bomb – Businessweek
Podcast of the Week
James Montier Explains Why Corporate Profits Keep Going Up – Odd Lots, Bloomberg
Last Week
Housing was a bright spot with the National Association of Home Builders survey advancing further into expansion. Building permits and housing starts both came in above expectations. Jobless claims continue rising steadily. Services data pointed to growth while manufacturing contracted in the latest S&P survey.
The Week Ahead
Before the long holiday weekend, plenty of economic data will be released. Consumer confidence and sentiment reports will give another soft datapoint on how households feel. The price data for the Personal Consumption Expenditures Index will be a notable clue on the direction of inflation.
Thank you for reading.
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