When a blip denotes “strength”!

The “reasoning from a price change” mistake # 5432

Diane Swonk ‏@DianeSwonk  2h2 hours ago

Core retail sales strong as saving at gas pump fueled some eating out and drinking and holiday purchases at sporting goods stores

As the chart shows, that doesn´t sound right! Otherwise, retail sales growth, core or otherwise, should have climbed a lot over the past year!

Diane Swonk_1

What´s really going on is that AD growth is faltering.

Diane Swonk_2

2 thoughts on “When a blip denotes “strength”!

  1. The Yellen Fed has already offset any gain that might have been had with falling oil prices… and then some. We get nothing, nada, zip, and it is for no good reason – so sad it makes me want to cry.

    • Bonnie, it´s worse than that (if that is possible). I´ll write a post showing that the fall in oil is indicative of a negative demand shock (falling NGDP and NGDP expectations) that the Fed has been “baking” for over 1 year.

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