Consumers Are Right About the Economy Being Better and Getting Worse

April is the most beautiful month

Most people misunderstand why TS Eliot’s “Wasteland” narrator thought so. April was the cruelest month.

The narrator begins the poem deeply lamenting the collapse of marriage and the ruin of civilization. April’s cruelty consisted of its very beautyIt’s the month of the resurrection that the only person who can say “winter kept us warm” in Elliott’s narrator looks so repugnant.

Of course, you shouldn’t really agree with that idea. April is a wonderful month precisely because lilacs and lilies rise from dead lands. In our little garden in the woods of New England, The tulip pushed the stem to the ground again, the buds turn from green to yellow. Crocuses are everywhere and forsythia land by the roadside.

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April and late March are Easter season for Christians. Christ is risen. Elliott’s narrator, in effect, mourning salvation.

In recent economic commentary, the reaction of gloomy people resisting the recovery in April’s economic outlook was rife. Even improvements in the manufacturing sector seem like something to be reviled. Like someone in a seersucker suit to a funeral.

Perhaps surprisingly, the distaste for economic currents seems bipartisan these days. The right hates talk of economic revival. Joe Biden admits he’s recoveredLeftists fear that an ever-expanding economy will undermine their support for higher government budgets and looser monetary policy. The Biden administration wants us to believe both that the economy is doing well and that its strength depends almost entirely on the policies of the Biden administration.

Consumer confidence improved and deteriorated in April. Indexes that track current economic conditions rose, while those predicting the future fell.This is not a contradiction, but leads us to think that it accurately reflects the economic situation and outlook. Data on house prices, new home sales and the S&P Global ‘flash’ composite show the economy gained momentum in his April. Yield curves, leading indicators, and expectations indicators point to a recession approaching.

How much growth or shrinkage is real?

As we pointed out several times last year, a lot of obvious growth Disappeared when viewed through the lens of inflationThe Producer Price Index has regularly suggested that increases such as in durable goods orders are better explained as evidence of price increases than real price increases. That trend has eased as inflation has fallen in the second half of last year. The growth in orders was real.

March, Core capital goods orders fell 0.4%This was much worse than expected. Wall Street economists had forecast a 0.2% gain. Economists surveyed by Econoday had a range of forecasts between -0.2% and +0.4%. So this was not only an oversight, it was far worse than the pessimist wrote.

Still, the producer price index fell 0.5% in March. The Intermediate Demand Processed Goods Index fell 1%. Using either as a deflator for durable goods, real demand appears to have increased in that unconventional economic mathematics It does not appear in official government statistics, but caution should be exercised when evaluating the data.

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