Good Morning. I’m back from vacation, rested and ready to analyze what could be a very interesting month. First, a thank you to my readers for the mini-break and the reduced posts last week. I do hope the educational topics were helpful.
A lot happened last week. The big question of what scared the Fed into launching QE3 was revealed as the economy is imploding. GDP is at stall speed, durable goods look like November 2008 and this Friday’s NFP report based on past weekly claims data is not very promising. Last week’s improved claims data is not a September number but rather October.
It is still very likely the US has contracted in Q2 even though GDP is still positive at 1.3%. It takes the BEA six to twelve months at times to revise the first quarter of contraction during the start of recession. It’s also worth noting with Q2 GDP so low, any contraction on monthly data series pushes the US that much closer to contraction aside from any BEA optimism.