MOOSPEAK: JUL20.2025
An Unbelievable Economic Surprise
This week the Feds and others released a dozen economic data points of varying importance. The data included initial and continuing jobless claims, Michigan Consumer Sentiment, the Philadelphia Fed Index, the NAHB Housing Market Index, Empire State Manufacturing, Industrial Production, Capacity Utilization, Retail Sales, Housing Starts and Building Permits. The unusual thing about it: every single data point beat its consensus forecast and is up from the prior period. How often does that happen? Like never? I’ve certainly never seen it.
I apologize. After watching the Biden Federal data-mill for four years with the kind of increasing skepticism that ultimately devolves into total disbelief, I’m pretty sure that I was scarred by the experience. Every time I read a data report these days, I’m wondering who prepared it, what their motives were and whether they put even the slightest grain of truth in it at all. I know there’s a different crowd in charge now, but bureaucrats who gather and formulate the data are the same.
I know I should be happy seeing my government finally on the right track and hitting on all cylinders, but instead, my knee-jerk reaction is “No Way!”.
Oh, me of little faith… I suppose it’s possible that all the forecasters low-balled the June-July economy and either understated the rebound or overestimated prior weakness. After all, there was considerable uncertainty going into June before Congress took care of taxes, spending and the debt ceiling in HR1. Tariff uncertainty still exists and could conceivably have colored the estimates, as well. Then there’s the reality that there are a lot of folks, here and abroad, who want to see this government fail and are vocal about it.
As of last week, there’s not only no recession on the horizon, but the June/July data release was unbelievably good. Moreover, in a separate report, import inflation is running at an almost non-existent 0.2% year-over-year. Obviously, the widely predicted tariff-induced stagflation is not happening yet. My guess is, even if tariffs go into full effect August 1, it will be Q4 before we begin to see some sort of identifiable economic impact.
