Newsletter - Kamran Afshar Associates Inc.

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BROWSE POSTS

The advanced estimate of the 2nd quarter GDP shows a decline

8/1/2022, 10:48:29 AM

According to the Bureau of Economic Analysis, the advanced estimate of the US economic growth shows a decline of 0.9% during the 2nd quarter. The second quarter's actual growth was 7.8%; however, our current exceptionally high inflation exceeded the growth rate resulting in a decline. We must go back to the 1st quarter of 1981 to see a higher quarterly inflation.

Is a Recession on the horizon

7/14/2022, 2:40:29 PM

The most common question I am asked these days is whether we will have a recession. The simple answer is that recession is part of the business cycle, so eventually, of course, yes, but whether or not we see it this year is the subject of this short piece.

Federal Reserves raised its lending rate by 75 bases points

7/14/2022, 2:39:08 PM

The FED announced that according to its statutory mandate to seek maximum employment and price stability, it will raise its lending rate by 75 bases points to 1.75%. While this may sound very low, considering that it was less than a quarter of a percent halfway through March, this is a significant change, all of which has taken place over the last 3 months. Why in such a harry? The FED, alongside most economists, expected the inflation to be transitory LAST SUMMER. Science, however, is evidence-based; data from last September started to disagree with that assumption. As a result, since last October, many economists began to call for higher rates; but the FED continued believing that inflation would go away and didn’t want to be confused with the facts.

Inflation dropped slightly in April, light at the end of the tunnel?

7/14/2022, 2:40:00 PM

According to the Bureau of Labor Statistics, the consumer price index (the CPI) increased in April by 0.3%, a quarter of its explosive 1.2% leap in March, and its lowest level since September of last year. It should be noted that April’s inflation rate translates into a 4.1% annual inflation, which would be a great inflation rate to have, considering that inflation over the last 12 months was 8.2%. And ironically, even this is a step down from March’s 8.7%.

2021 Year in Review

7/14/2022, 2:41:38 PM

2021 was a transitional year, as the economy, dampened by the COVID virus, took off with exceptional growth thanks to a new vaccine and a significant infusion of government transfer payments to individuals.

Payroll employment rose by 210,000 in November

7/14/2022, 2:42:45 PM

According to the Bureau of Labor Statistics, payroll jobs increased by a net 210,000 during November. This, coming on the heels of a whopping 613,000 jobs added in October, makes the total number of new payroll jobs created in the first 11 months of this year 6.1 million. It should be noted that the number of jobs created during November was larger than the net increase noted above by order of magnitudes. More than 4 million people quit their jobs during the month, and another 2 million were let go or otherwise separated from their jobs. So there were close to 6.5 million new hires in November.

Real Retail Sales rose by 9% over its last year’s level in February

7/14/2022, 2:43:39 PM

According to the Census Bureau's Advanced retail sales report, after adjustment for inflation, retail trade rose by 9.0% above its last year’s level in February, a very clear indicator of the US’s continuing strong economic growth.

Consumer sentiment index rose in December

7/14/2022, 2:44:07 PM

According to the University of Michigan, the consumer sentiment index rose by 5% in December, while still well below its June and July highs, it was a step in the right direction. COVID's Delta variant in summer and the Omicron variant in late fall and the persistent inflation dropped the consumer sentiment way down through November. However, the increase in December was expected, well more like hoped for, due to the over-reaction of the previous months.

The GDP dropped by 1.5% during the first quarter of 2022

7/14/2022, 11:27:02 AM

According to the Bureau of Economic Analysis, the US economic growth declined by 1.5% after adjustment for inflation during the 1st quarter. The first quarter’s actual growth was 6.5%; however, inflation ate all of that growth and then some. Despite the 1st quarter’s decline, the US economic growth over the 12 months ending in March 2022 was a strong 3.5%.