US Economy

11

US enters travel boom!

The evidence continues to accumulate that once populations are vaccinated they rush back into travel. A lot of fun is being had in US travel spending right now: Mobility is through the roof: Travel checkpoints are approaching the bottom of pre-COVID ranges: Likewise, hotel occupancy: It is my view that not only will travel rebound

3

US eating out and travel surge with vaccine

Some more today on the US economic recovery, which is the leading indicator for the world as the vaccine glut approaches in H2. Goldman sees: The post-vaccine reopening of the economy is barely underway, but our expectation of accelerating sequential growth is transitioning from forecast to fact. Credit card data are consistent with a mid-single-digit

7

Will Biden tax hikes kill the stock market?

The Biden Admininsatrion has already delivered a much larger fiscal support package than anybody in markets predicted. It did so by using the US Budget Reconciliation process which enables Dems to bypass Republican loons in the senate and their favourite tactic of filibustering. The Budget Reconciliation process only requires 50 votes to pass not the

3

UBS: Huge profits boom ahead

UBS is getting on board with the MB profits boom thesis based upon tearaway US growth, strong fiscal support, a global inventory rebuild and top-line growth landing on lean post-recession business: Revising S&P 500 target to 4250 on strengthening earnings expansion As equities de-rate amidst the jump in rates, much better than expected earnings should

35

A Biden boom of immense proportions

The Biden Administration is moving swiftly from emergency stimulus support to longer-term infrastructure spending to keep the US economy stronger for longer. Bloomberg has more: An overall spending package worth between $2-4tr will be proposed. It will focus on roads and green infrastructure. It will be funded by tax hikes for corporations from 21% to

4

After the US boom comes the US bust! (or does it?)

The US economy is entering a rude boom. It has tailwinds from monetary and fiscal policy, vaccine policy and catch-up growth plus, in due course, renewed investment into shale oil. So much we already know. But, before long, it will also turn on its head, via Goldman: 1. Senate passage of the nearly $1.9trn American

0

What do consumers buy post-vaccination? Travel

BofA with a terrific little insight into what consumers buy the moment that they feel confident that they’ve seen off the virus: Post-vaccine behavior–generational data: We focus on spending trends amongst traditionalists which are aged 73–92 and are therefore most likely to have received the COVID vaccine. In particular, spending on airfare surged for traditionalists

7

US flogs the virus

BofA with the lastest charts: The latest update to University of Washington’s IHME Covid-19 model shows dramatic improvement in the trajectory for the US Covid-19 situation between now and the summer. They no longer predict another spike in daily infections due to the more infectious mutated variants, all that remains is a bump–i.e. a March

13

US economy boom builds

Readers will know that we have a very bullish outlook for the economic recovery this year. Indeed, we see the US at Chinese-style growth rates for the next year before coming off. The reasons for this are: An ongoing global inventory cycle in goods production that has American wholesalers and retailers short of stock. A

9

Goldman: Why the US economy won’t overheat

The trade de jour is the steepening yield curve and rising inflation. I have noted many times that the inflation narrative is much more cyclical than it appears owing to early cycle constraints that will fade relatively quickly into 2022. The other driver, so say the narrative, is MMT and runaway US fiscal support. Goldman

1

Beware the illuson of wages growth

Via the FOMC: Despite a sharp spike in unemployment since March 2020, aggregate wage growth has accelerated. This acceleration has been almost entirely attributable to job losses among low-wage workers. Wage growth for those who remain employed has been flat. This pattern is not unique to COVID-19 but is more profound now than in previous

16

America whips the virus

It’s been a long and hard road including, in my view, the expression of Donald Trump’s revenge on the American people for giving him the boot, but the US is on track to whip COVID-19 by mid-year. Levels are still high but falling fast. Via BofA: The number of people hospitalized with COVID-19 in the

38

The Trump impeachment video

House impeachment managers introduce video evidence as part of their case against Donald Trump, depicting one of the darkest days in American history. pic.twitter.com/7G2Jf1PEnQ — Josh Campbell (@joshscampbell) February 9, 2021 The trial begins. The ABC reports on possible outcomes: “It seems very likely that Trump will be acquitted,” Professor Ackerman said. “From the point

2

Why higher American wages would be a blessing

For years, MB has campaigned for higher wages on the basis that it is what capitalism needs to survive. This position is based on sound economics, that is higher wages drive productivity gains, the longer-term input of rising living standards. And the understanding that unfettered capital chasing ever lower-wage jurisdictions is a race to the

0

BofA: US edging towards super-stimulus

Via BofA: As negotiations over the $1.9tr fiscal package continue, we are increasingly focused on the views of key swing voters in the Senate.•Atruly bipartisan deal will likely require support fromthe10 Republicans who have put forward a$618bn proposal. •The size of a Democrat-only bill will depend on what is acceptable to the most moderate Democrats—most

22

US is crushing the virus

BofA: The University of Washington IHME Covid-19 model estimates that daily Covid-19infections in the US peaked on December 23rdaround 340,000 and have since declined about 18%. In three months they estimate infections 70% off the peak, in line with the post-Labor Day low. That the number of infections peaked in December makes sense as we

0

MOAR US stimulus coming

Via Goldman: As expected, congressional Democrats released a budget resolution for FY2021 that, once passed, would give them the option to pass coronavirus relief legislation through the reconciliation process with a simple majority in the Senate without Republican support. After President Biden met with moderate Republican senators, the White House quickly signaled its support for

1

What can Democrats do and not do around fillibuster?

Via 538: The recent fight between Senate Democrats and Republicans over the rules that would govern the chamber this session was complicated and arcane. All you really need to know is that Democrats don’t seem likely to use their slim majority to gut the filibuster. So, what exactly can Democrats do with a governing trifecta (control of the U.S.

0

BofA: US economy to the moon!

Via BofA: You want to know what 6% growth feels like? We have become increasingly convinced of the prospects for exceptional growth this year. We came into the year with an above-consensus forecast of 4.5% which was boosted to 5.0% upon the earlier passage of stimulus. As warned, we are taking another leap forward and

11

BofA: Biden to bring wage not asset inflation

Via BofA: President Biden has been busy During his first days in the White House, President Biden has signed 40 executive orders (EO) and memoranda, roughly grouped into the six themes below: COVID containment: A well-coordinated COVID response(mask mandates, invoking the defense Production Act for vaccines/PPE, etc.) argue for a faster return to normalcy. Economic

26

Bernie Sanders chases higher wages

Via The Guardian: Leftwing senator tells Guardian the chances of raising the federal minimum are better than ever with new president in White House Senator Bernie Sanders says the widespread suffering caused by the pandemic-induced economic crisis has made it “morally imperative” to increase the US’s minimum wage to $15 an hour. And in an