Do Rising ‘Global’ Growth Concerns Include An Already *Slowing* US Economy?

Global factors, meaning that the wave of significantly higher deflationary potential (therefore, diminishing inflationary chances which were never good to begin with) in global bond yields the past five months have seemingly focused on troubles brewing outside the US. Overseas turmoil, it was called back in 2015, leaving by default a picture of relative American strength and harmony.

The rest of the world’s economic system hasn’t really come back much, and there’s much to suggest we’ve already seen it’s best days anyway. The American piece in it, on the contrary, it has been characterized as a singularly impressive bright spot; especially the goods economy which by all ongoing symptoms remains in a frenzied state.

Does that accurately summarize the American end of things, though? We know questions abound as to abroad, but is what’s going on inside the US really an outlier?

Maybe not as much as it might otherwise seem. And I don’t mean that the rest of the global economy looks to be picking up speed in order to catch up and join the US frenzy on the reflationary side of things. On the contrary, there’s quite a lot of gathering data which is pointing toward a broader US trend looking a lot more like that around the world.

Serious questions have to answer locally, too.

Start with a more esoteric yet comprehensive gauge like the Chicago Fed’s National Activity Index (CFNAI). You’d think, given the fuss about the goods buying mania, that if the whole domestic system were to match it, or even approach it, then this alleged inflationary boom would have to keep something like the CFNAI so far above zero as to be more like the early eighties.

It’s not working out that way, though, with the latest reading for June 2021 just 0.09; indicating growth barely above a trendline that had already been insufficient to begin with. And this is not just a single month variation or noisy statistic; the huge down/up in February then March aside, the past three months (April, May, and now the initial estimate for June) have been curiously lackluster.

The average for 2021’s second quarter was all of 0.06, compared to an average of 0.60 during the first quarter despite the huge dip in February. This points toward a considerable and sustained slowdown.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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