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404 – Web page Not Discovered Acquire US

The title of this week’s Weekly Wire might sound a bit off contemplating that the US economic system added 517,000 jobs in January, the US unemployment price sits at 3.4%, retail gross sales have been up 3% in January and final week’s Weekly Wire made the case that one BIG motive to not financial institution on a recession was the resiliency of the US shopper, noting that with shopper spending accounting for about 70% of US GDP, if the patron was okay, the economic system must be okay. So, have we had a change of coronary heart concerning the outlook for the US shopper and in flip the US economic system, a minimum of within the close to time period?

The reply isn’t any, the US shopper, supported by a nonetheless strong labor market (final week, preliminary and persevering with jobless claims each got here in decrease than anticipated) continues to spend liberally (final week we discovered private spending in January elevated a larger than anticipated 1.8%). That stated, in attempting to grasp the outlook for the economic system and, in flip, capital markets, it’s at all times greatest to maintain an open thoughts and think about knowledge factors that each align with one’s considering and run opposite to 1’s considering. Because it considerations the latter, the information level that we’re calling out this week, that we now have constructed this week’s notice
round comes courtesy of the Federal Reserve Financial institution of New York, or extra particularly its very well- regarded Liberty Road Economics weblog, which famous in a current posting that Q4 2022 bank card delinquency charges had surpassed pre-pandemic ranges for almost all demographic cohorts (see chart).

If—and it’s a large if—the patron is starting to crack only a bit underneath the burden of upper borrowing prices and better inflation, that dynamic would seemingly current itself early in bank card knowledge. As we famous final week, the US shopper and the US economic system have largely exceeded Wall Road’s expectations yr up to now. We marvel if that may show to be the case via the again half of 2023.

Obtain the weekly wire

The views expressed are these of Brinker Capital and usually are not supposed as funding recommendation or advice. For informational functions solely. Brinker Capital Investments, LLC, a registered funding advisor. 631-BCI-2/27/2023

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