So is it still the economy stupid?

Consumer prices rose 0.4% in February and 3.2% from a year ago

• The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago. The monthly measure was in line with expectations while the 12-month reading was slightly higher.

• The core CPI rose 0.4% on the month and was up 3.8% on the year. Both were one-tenth of a percentage point higher than forecast.

• A 2.3% increase in energy costs helped boost the headline inflation number. Food costs were flat on the month, while shelter climbed another 0.4%.

The goal is to bring inflation down to around 2%. Once we hit 2% then the Fed can start lowering rates and the economy should improve. In fact, it might actually really take off, especially if we got a positive switch in our Presidential leadership from an old geezer who hates Americans being successful to someone who embodies financial success.

Are we currently in a recession?

Not according to any of the numbers associated with the GDP.

GDP growth has been healthy since back to back negative quarters in 2022. But then again, if certain people want to argue that negative GDP is not the definition of a recession then certainly positive GDP also cannot prove that we are not in a recession. It cannot just work in one direction. If you make a recession a moveable target rather than something people can understand, then it just becomes how people feel. Right now people still feel the economy is going in the wrong direction and many will argue that they feel like we are in a recession.

Furthermore, if you drill into the perception it comes largely from the idea that inflation and the cost of living has gone up and continues to increase at a level that makes it difficult to keep up. We are seeing higher credit card debt, people are not saving as much, and there was just an article stating that people dipping into their retirement savings (401K and such) is at record highs. The single GDP number is not going to matter much to people who have less money to spend and more bills to pay.

The concept of inflation resurfacing it's ugly head just a few months before the November election bodes negatively for our sitting President, especially when he continues to argue that we have beaten inflation and our economy is roaring. While such optimism might have it's place from time to time, when used in the wrong context it creates the impression that the optimist is simply out of whack with reality. I believe that is exactly how Joe Biden is being seen by most Americans. An old out of touch Washington insider with no clue how the rest of America suffers.