Both new households and new businesses are in secular decline. Goosing the stock market and GDP doesn’t change this reality.
Everyone wants every cycle of expansion to last forever, but alas every cycle ends. The growth cycle that began in 2009 is finally coming to an end.
The signs are everywhere, notwithstanding the torrid 3.2% GDP growth for the first quarter of 2019 (which as others have noted, is less than meets the eye.) Gross Domestic Product (GDP) is the standard measure of expansion, but it is an imperfect metric. GDP can still notch gains while the majority of the economy is stagnating and assets are losing value.
All of these measures of expansion are stagnant, indicating that monetary and fiscal stimulus
Global sales of pricey mobile phones and vehicles have slowed, indicating the exhaustion of the cycle is global. Again, this is classic late-cycle activity: trends that powered the
Prices are reaching unaffordable levels across the board: homes and rents in big cities are unaffordable, fine dining is unaffordable, property taxes are unaffordable, construction is unaffordable, autos and trucks are mostly unaffordable, fast food is increasingly unaffordable, college tuition is beyond-unaffordable, healthcare and healthcare insurance are insanely unaffordable– the list includes the vast majority of the costs of living. (Cheap TVs are getting a bit cheaper. Yea for low inflation!) Rising prices are also classic late-cycle signs. To make a buck, everyone has to raise prices and cut what they can, and rising prices impacts sales.
Those being paid to hype “the Bull market and the expansion will never end” narrative are experts at turning late-cycle blips into evidence that the cycle has plenty of room to run, but the more prudent observers are looking at the preponderance of evidence.
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