How is the U.S. Doing?

Jul 27, 2023 | Bubble Monitor, No Bull Economics

Weekly Dashboards

2Q23 GDP was up +2.4% y/y after a +2% 1Q increase, so it looks like the Fed’s most recent 0.25 rate hike was warranted – right? Anything to get us to 2% inflation… Wait, the 2Q23 PCE price index rose just +2.6% y/y, down from +4.1% 1Q’s results. So we are basically at your inflation target, but still hiking interest rates? Mr. Powell, how come the monetary authorities in China & India are not pushing their economies into recessions in order to combat this dangerous disinflation? We wish the Fed would read our posts this week to better understand why it needs to layoff for the sake of the country’s global positioning and, in particular, our very important labor & real estate markets!   

Bubble Monitor Chart
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If you agree with us that one primary reason the Fed has been raising interest rates is to defend the US$ (as opposed to fighting inflation driven by supply constraints), then we propose a much better method to achieve that end without wrecking domestic economic growth.

  • It seems like all the headlines captivate with controversies surrounding media, politics, culture, climate, and threats of WW3. However serious these challenges may be, it is important to recognize that they distract us from a very serious, and quantifiable threat to our immediate well-being: economic annihilation.
  • While we are not endorsing the accuracy of the IMF’s projections below, it is important to consider their directional trends and orders of magnitude. Using this framework, it is easy to see that the U.S. is in serious trouble as it relates to our global competitive positioning.
  • It is high time for U.S. business leaders to ask why our already underperforming domestic growth is trending down. It’s not OK for U.S. companies to become content to drive growth overseas and we must stop looking for political solutions to a domestic private market problem.
  • The U.S. must prioritize domestic growth ASAP with a goal of becoming at least as competitive as China & India. If we do, the US$ will remain strong & resilient and the Fed will not be forced to support the greenback with financial engineering that always comes with dangerous side effects.
World Economic Outlook Growth Projections Chart

Source: World Economic Outlook Update, July 2023: Near-Term Resilience, Persistent Challenges (

Weekly Publications

Public Posts

Part 1: Keeping a Close Eye on the Commercial Real Estate Market

Part 2: Regulators Make Accommodations for CRE Collateral Stress

Consumer Resiliency Remains Challenged by Formidable Housing Costs

Premium Posts

Domino’s 2Q23: Delivery Struggles Prompt New Uber Partnership

American Airlines 2Q23: Highest Quarterly Revenue in Company’s History

Robert Half 2Q23: Tentative Employers

Equifax 2Q23: Consumer Strength Amidst High-Interest Rate Environment

ManpowerGroup 2Q23: Labor Market Remains Resilient

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15 Second Posts

Latest Release for Personal Consumption Expenditures (PCE)

The consumer still looks good according to the government’s recent release of personal consumption expenditures (for August 2023) as there have not been any material changes in growth for either disposable income or consumption expenditures.

Small Biz Insights on Trucking Industry

In this post, we discuss the massive post-covid changes to the trucking business with Tony Lovallo who has been running his own freight company since 2010. Tony’s insights provide a 360 look into the shipping business & consumer patterns with important economic implications.

Darden 1Q24: Sales +11.6% Y/Y, Comps +5.5% Y/Y

Darden reported that industry same-restaurant sales increased +0.9% and industry same-restaurant guest counts decreased -4.2% during its fiscal 1Q24. The chain’s comps outperformed the industry by +4.1% and its traffic outperformed by +4.3% (= flattish traffic for Darden during the quarter).

Job Market Looks Solid

In this chart, we subtract total quits from total hires. The excess of hires over quits looks very good relative to the historical level even though the positive gap recently dipped slightly. Workers are staying at their jobs longer even as they continue to have new employment opportunities.

The Economics of Politics

As the U.S. gears up for the 2024 elections, it is important to consider changes to our elections and governance that can unite the citizens of this great country.

2Q23 Retail Same Store Sales

NoBull’s Retail Same Store Sales Report benchmarks 80+ large consumer retail companies by domestic same store sales including annual (2019 – 2022) and quarterly results (2Q22 to 2Q23).

Walmart Investor Presentation: Inflation Here to Stay

While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.

Interesting Conversation with Fed Chair Powell

Okay, Powell didn’t actually take our call, but we offer a transcript of a potential discussion between the Fed Chair and John Q. Public. It’s very insightful, so please read on.

The Problem with Investment Diversification

Every investment advisor and business student knows that portfolio diversification is key to wealth building. Show me an investor who can beat the S&P 500 Index by buying a few handpicked stocks and I will show you a hedge fund manager in the making. However, there is a huge problem with this strategy that no one is talking about.

Part 3: Analyzing Performance of Low-Income Oriented Retail Companies

We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23. 

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