Articles authored by Sonu Varghese

The Bureau of Economic Analysis just reported that the U.S. economy expanded by only 1.1% in the first quarter. By the way, that’s an annualized rate – the actual quarter-over-quarter increase is just under 0.3%. This was well below expectations for 1.9% growth. More fodder for recession calls? Short answer, no. GDP can basically be …

The Conference Board just released its consumer confidence index for April, and the data wasn’t great. The index fell from 104 to 101.3, and it is well off last December’s 109 level. Not to mention the fact that it’s more than 30 percentage points below where the index was in February 2020 (just before the …

Housing was the biggest drag on economic growth last year. The economy grew by 2.1% in 2022, but that overcame a 0.93%-point drag from residential investment, i.e. housing. In fact, it’s been a drag on GDP growth for 7 straight quarters now (through the end of 2022). It got worse over the last 3 quarters …

Corporate bankruptcies are rising in 2023, based on S&P data. The first 3 months saw 183 bankruptcy petitions, which was the highest for a first quarter since 2010. March alone saw 71 corporate bankruptcy petitions, the fourth straight month of increase and the highest monthly total since July 2020. Obviously, the most noteworthy bankruptcy filing …

Inflation is on everyone’s mind these days, but as we wrote last week, the good news is that inflation is on a relatively strong downtrend. As of March, CPI was up 5% over the past year, but well below the peak of 9.1% we saw last June. However, even 5% inflation is really elevated. No …

The March inflation report showed that CPI inflation rose only 0.1%, slightly below expectations. Over the past year, inflation is now up 5%, well off the peak 9% from June 2022. As you can see below, the big driver of lower inflation has been energy and food. Energy makes up about 7% of the “inflation …

Another month, another strong payroll report. The economy created 236,000 jobs in March, topping expectations for a 12th straight month. A record streak that is more than double the previous longest streak (before the current expansion). That in and of itself tells you how strong and underestimated this labor market is. Prior to the report’s …

There’s always been talk about the U.S. dollar (USD) losing its dominant currency status globally, but lately, the chatter seems to have increased, especially since Russia’s invasion of Ukraine, which saw the US impose severe and expansive sanctions on Russia and Russian officials – enabled by the fact that the US treasury has jurisdiction over …

Here’s something really positive about the US economy It’s hard to get away from the negative headlines that have accompanied the Silicon Valley Bank crisis. Recession calls have seen a renewed uptick since the crisis unfolded, whereas they were dying down prior to that, thanks to positive economic data in February and early March. Note …

Most risky assets have had a volatile stretch since the Silicon Valley Bank crisis began. The S&P 500 Index has recovered but is still down about 0.5% between March 8th (the day prior to the crisis unfolding) and March 28th. In a welcome change from last year, bonds have zigged while stocks zagged, with the …