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CFE Analysis

Not so fast about the bond vigilantes

There is much excited talk in the press these days about the rise in ten-year yields to 1.5 percent and the rise to 2 percent for the breakeven inflation rates expressed when we comparing Treasury nominal and TIPS yields. The bond vigilantes are back! Another Great Inflation around the corner!

CFE Analysis

Recovery, Expansion, and an Old Normal Yield Curve

In December of 2019, the U.S. unemployment rate stood at 3.6% and prime age labor force participation, at 82.9%, was at an 11 year high. Today, December 2020 jobs figures were released, with unemployment at 6.7% and participation at 81%, both making it clear that today’s economic backdrop is bleak. These data also make clear that engineering an extended period of strong growth is highly justifiable.

CFE Analysis

The Year of the Pink Slip

How bad a year was 2020? During the year, the United States economy lost a net 9.4 million jobs — 6.2% of the jobs it had at the end of 2019. That is by far the largest annual decline since 1950. The years that included the financial crisis more than a decade ago had seen the largest losses of jobs, with a 3.7% decline in 2009 following a 2.6% fall in 2008. The year just ended was a little worse than the two of them combined.

CFE Analysis

What Do GDP Figures Show?

The United States, unlike many countries, releases its GDP figures as annual rates. That makes no sense now, when there are clearly forces at work that will not continue for quarters to come. It makes more sense to say the economy contracted 9.0% in the second quarter and expanded 7.1% in the third quarter.

CFE Analysis

The Jobs That Are Not Back

Friday’s employment report indicates almost half of the jobs that vanished in the Pandemic have been recovered.. But there are some industries where there has been hardly any recovery – and those are mostly businesses that will not come back completely until there is a widespread belief that COVID-19 is no longer a threat to what used to be considered normal activities.

CFE Analysis

Will the economy get worse?

Source: The Conference Board Remember the sunny forecasts when the Pandemic began? This was to be a brief recession, followed by a “V” shaped recovery. You could see that forecast […]