The Long Term Investor

A reminder......I talk a lot.....really a lot....about day to day short term "stuff" on here. It is mostly IRRELEVANT to me as a long term investor. I am not looking at this stuff as a tool in planing investment moves. I have no plans to make ANY moves based on short term chaff.

I am interested in business, the economy, psychology, etc, etc, etc. So I look at and read this day to day stuff. BUT.....I would be just as comfortable with my portfolio and investing if I NEVER read any short term junk.

 

The.....sensational....economic story of the day.

Wholesale prices soar 10% in February, highest level on record
Economists expected the PPI to rise by 10% on annual basis

https://www.foxbusiness.com/economy/wholesale-prices-producer-inflation-february-2022

(BOLD is my opinion OR what I consider important content)

"Wholesale prices accelerated again in February as strong consumer demand and pandemic-related supply chain snarls continued to fuel the highest inflation in decades.

The Labor Department said Tuesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, surged 10% in February from the year-ago period. On a monthly basis, prices grew by 0.8% – a slight slowdown from January, when the gauge spiked by 1.2%.

Economists surveyed by Refinitiv expected producer inflation to rise by 10% on an annual basis and 0.9% from the previous month.

Core inflation at the wholesale level, which excludes the more volatile measurements of food and energy, increased 0.2% for the month, following a 0.8% increase in January. Over the past 12 months, core prices were up 6.6%.

Gasoline prices, which soared 14.8% in the month, accounted for nearly 40% of the February increase. Overall, prices for goods jumped 2.4% last month, while prices for services remained the same.

The surge in wholesale prices comes on the heels of a separate Labor Department report released last week that showed consumer prices climbed 7.9% in February from the previous year, the biggest increase since January 1982, when inflation hit 8.4%. Consumers are paying more for everyday necessities, including groceries, gasoline and cars.

The eye-popping reading – which marked the ninth consecutive month the gauge has been above 5% – has ramped up pressure on the Federal Reserve to chart a more aggressive course in normalizing monetary policy. The central bank is almost certain to raise interest rates at the conclusion of its two-day, policy-setting meeting on Wednesday, with most economists penciling in a 25-basis-point hike as the start of a series of increases that could last for most of the year.

Hiking interest rates tends to create higher rates on consumers and business loans, which slows the economy by forcing them to cut back on spending.

Fed Chairman Jerome Powell has left open the possibility of a rate hike at every meeting this year and has refused to rule out a more aggressive, half-percentage-point rate hike, but he said it's important to be "humble and nimble."

"We’re going to be led by the incoming data and the evolving outlook," he told reporters during the central bank's policy-setting meeting in January.

Sky-high inflation is a global problem that has been driven by a faster-than-expected economic recovery from the pandemic, strong consumer demand, an influx of government stimulus and disruptions in the global supply chain.

The war between Ukraine and Russia is also threatening to send global prices even higher as it impedes the world's access to energy supplies. Although oil prices dipped below $100 per barrel on Monday, gas prices in the U.S. remained above $4 a gallon.

"Next month’s report will include the geopolitical shocks from the Russian invasion of the U.S., so we expect volatility in the underlying data given the spikes in commodity prices," said Jeffrey Roach, chief economist for LPL Financial. "

MY COMMENT

What I think is the story here is the LACK OF REPORTING of this data. This story is not even visible on some of the major financial sites I read.

The article above has a good amount of fear mongering built into it.......especially in the second half of the article. In FACT most of the recent data reported in this article represents a slight DROP from the prior month. AND.....nothing here was outside of expectations.

 

With the total obsessive focus on the short term right now it is easy for investors to lose track of what really counts......the LONG TERM INVESTING RESULTS. Take your investing results this year to date and assume that is how you end this year......probably a loss. Add that loss and the results last year and see what you get as an average....probably a total return over 10-12%. That would be considered a great result for the long term and will double your money every 6-7 years.

The long term return is ALL I care about. My focus as an investor trying to provide security to my family and heirs is TOTALLY on the long term investing total return average. That is why my PRIMARY investing goal is to average at least 10% over the long term. I am TOTALLY content to double my money every 6-7 years.

The single MOST IMPORTANT investing concept that I have ever learned over my lifetime is the RULE OF 72's. It provides an illustration of the POWER OF LONG TERM COMPOUNDING. This is the single reason that I invest the way I do and is my total single minded focus as an investor.

I like to celebrate and have fun with short term gains or big annual gains.....BUT.....that is NOT where the money is. The real money comes from racking up total returns of 10% or more for an extended time. That time for most people should be measured by a LIFETIME of investing and compounding your short term gains over the long term.

 

BUMMER......the bad news continues for home buyers in my little 4200 home neighborhood. We are now back to ONLY six houses for sale in the entire area. Nothing below $1MILLION. A totally BRUTAL market. It has been going on for the past two years and for the 5-6 years prior to that it was also a strong.....but not insanely crazy....market.

 

You made an offer TireSmoke? If so that is exciting. Do you know how many offers they got?

 

Killer day for me today.....finally. I was totally in the green. I also got in a BIG beat of the SP500 today......on a day when the SP500 was UP big. I was able to beat it by 1.40%.

I continue to bounce up and down in my trading range. I am looking forward to the FED raising rates tomorrow. It is time to get going and make it happen. At that point all the speculation becomes fact.

 

This probably had something to do with the little rally today.

Oil prices dropped 30% in a week. What gives?

https://www.cnn.com/2022/03/15/investing/premarket-stocks-trading/index.html

(BOLD is my opinion OR what I consider important content)

"London (CNN Business)After Russia invaded Ukraine, global oil prices experienced a dramatic spike. Just over a week ago, Brent crude leaped above $139 per barrel. Analysts warned prices could touch $185, then $200 as traders shunned Russian oil, pushing inflation even higher and adding huge strain to the global economy.

But there's been a rapid reversal since then. Brent crude futures, the global benchmark, have cratered almost 30% from their peak. They settled below $100 per barrel for the first time this month after shedding another 6.5% on Tuesday.
Stocks soared on the news as well. The Dow gained about 600 points, or 1.8%, Tuesday. The S&P 500 and Nasdaq rose 2.1% and 2.9% respectively.

What's happening: The unusually sharp pullback has been driven by hopes that Saudi Arabia and the United Arab Emirates could boost oil production, and that demand from China could drop due to new coronavirus restrictions in major cities. This would ease the squeeze on the market.

Yet analysts warn that we're not out of the woods yet. Oil is still trading significantly above what it costs to produce it, and extreme swings are likely to persist at a moment of huge uncertainty.

"I wouldn't rule out $200 a barrel just yet," Bjørnar Tonhaugen, head of oil markets at Rystad Energy, told me. "It's too soon."
Following the invasion, oil prices skyrocketed as traders began to see Russian crude exports as untouchable. This sparked concerns about how that supply of between 4 and 5 million barrels per day could be replaced, especially as demand for fuel ramps up over the summer.

Over the past week, however, investors seem to be considering whether they went too far, too fast. The United Arab Emirates' ambassador to Washington said that the country wants to increase oil production, sparking hopes that the Organization of the Oil Exporting Countries, or OPEC, could intervene after all. Meanwhile, Russia and Ukraine are still talking, even as the war rages.

Plus, China's commitment to halting the spread of Covid-19, which has led to a lockdown in the tech hub of Shenzhen and new rules in Shanghai, could mean the country needs less energy in the short-term. China imports about 11 million barrels of oil per day.

"People remembered we are still in a pandemic," Tonhaugen said.

Why it matters: The drop in oil prices has helped prevent gasoline prices from moving higher in the United States. They've stopped climbing for now, though a gallon of gasoline still costs almost $4.32 on average.

While $100 per barrel of oil is still extremely expensive, if prices stay in that range, it could ease some fears about an acceleration of inflation. Policymakers would likely breathe a small sigh of relief.

But it's clear that investors remain unsettled as they process the effects of Russia's invasion. Russian oil is still being priced at a huge $26 discount to Brent.

And analysts believe the direction of travel has been set. Giovanni Staunovo, an analyst at UBS, expects oil to trade at $125 per barrel by the end of June. For his part, Tonhaugen of Rystad Energy thinks prices could still smash records as the conflict plays out.

"This is the quiet before the storm," he said.'

MY COMMENT

WHATEVER......no one has a crystal ball. With the thinking uniformly negative....the odds are probably increased for any surprize to be to the positive side of things.

 

Here is the second part of the article above.....for those tempted to invest in companies that are totally controled by the worlds most brutal communist dictatorship......CHINA.

The sell-off in Chinese stocks is getting deeper

Investors have been racing to dump stocks in Chinese companies as worries grow about the consequences of a crackdown from regulators and a spike in Omicron cases. Whether Beijing could provide support to Russia, and be punished by the West for doing so, is adding to the fear.

"There may be growing caution over the potential for secondary sanctions on China," TD Securities strategist Mitul Kotecha told clients.

The Shanghai Composite dropped almost 5% on Tuesday. Hong Kong's Hang Seng fell nearly 6%. The index has plunged more than 10% over the past two trading sessions.

The declines came despite surprisingly positive economic data from China Tuesday. Retail sales rose 6.7% in the first two months of this year compared to the same period in 2021. Industrial production jumped 7.5%, trouncing economists' forecasts.
"The momentum of China's economic recovery has improved in January and February, laying a solid foundation for a good start in the first quarter of this year," said a spokesperson for the National Bureau of Statistics.

But as China fights its worst Covid-19 outbreak in two years, investors see little reason for optimism.

"With officials ditching targeted containment measures in favor of wholesale lockdowns, this has the potential to be even more disruptive than the Delta wave last summer, which led to a sharp contraction in economic output," Julian Evans-Pritchard of Capital Economics wrote Tuesday.

It's not the only reason investors are nervous. The tech giant Tencent could reportedly face a record fine for breaching Chinese anti-money launching rules, sending its stock into free-fall. Other big tech names like Alibaba have been battered after the Securities and Exchange Commission pressed ahead with a crackdown on foreign companies that don't meet US disclosure requirements."

MY COMMENT

The potential for all these Chinese companies to get kicked off American exchanges is HUGE. Add in the fact that you cant trust any of their company reports and the rampant FRAUD that dominates many of these companies including their management.......and....as usual.....there is NO WAY I will choose to invest in a Chinese company. Why would I want to anyway.....when I can invest in the greatest AMERICAN companies in the world.

 

I see very few articles about the FED tomorrow......it is strangely quiet considering the millions of gallons of ink wasted on the FED and interest rate increases over the past 6 months. I guess with FACT happening tomorrow and clarity from the FED....hopefully......all the so called journalists that have been pushing fear mongering opinion and speculation about the FED will now have nothing to say. Thank Goodness.

It would be absolutely typical of the markets to see the FED rate increase announcement kick off a RALLY. Not saying it is going to happen.....but I would not be surprised if it did either. Kind of the reverse of....."buy the rumor and sell the news". In this case it would be "sell the months of fear mongering"........and......"buy the news". CERTAINTY will go a long way to help out the markets on this issue......and......if the FED is smart......a big "if".......we will have that certainty over the next couple of days.

 

I sure hope this happens.....this time change routine is a waste of......"time".

Senate votes to make Daylight Saving Time permanent

https://www.cnbc.com/2022/03/15/senate-votes-to-make-daylight-saving-time-permanent.html

 

Surprise, surprise.......how many people thought the markets would be up today?

The final hour of the day will determine how we really do today. I am very glad to see the FED finally start to act.

 

I agree with this little article. In my view companies that are going to continue to do full work from home are committing......total or partial business suicide.

Work From Home' Is Much Easier Said Than Done

https://www.realclearmarkets.com/ar...ome_is_much_easier_said_than_done_821907.html

(BOLD is my opinion OR what I consider important content)

"Some companies have the luxury of allowing employees to decide whether they want to continue working from home or return to the office, while others are leveraging WFA (work from anywhere) options to attract talent and serve as a sign-on bonus.

However, the ‘do what you want’ mantra being championed by some, is not as simple as it sounds. In order for WFA policies to have long-term application, they must be carefully crafted with high expectations regarding disciplinary excellence and preset standards; and managers must reinforce the notion that an organization is made up of team members thereby requiring direction, attention, and connection.

Imagine a coach telling a sports team to practice where they want, when they want, and then on game day to simply deliver results. Coordination would be lacking and accountability would be unclear; and this has proven to be true when tried in the business realm.

Removing the hierarchical levels of an organizational structure (often referred to as flattened management) has been known to have disastrous results when not handled with great care. Indeed, organizational models that essentially cut out middle-level management and physical departmental oversight have proved problematic for not only performance levels but even employee morale (and Github and Medium can attest to this when it was tried during pre-pandemic times).

Zappos, which was the greatest champion for an autonomous work environment, now serves as the greatest example of why such a model can be detrimental. After roughly six years of trying maximum flexibility and autonomy via its self-governance company policy, Zappos needed to reinstate an organizational structure due to employee backlash and high turnover rates.

The Financial Times reported in 2019 that organizational models devoid of a hierarchy in no way represent a workers’ paradise; and egalitarian workplace systems were being viewed as a naïve notion rather than worthwhile strategy up until 2020.

But, when the pandemic hit, there was no choice – the office became obsolete, WFA was required, and some managers lost touch with their teams creating a new interest in removing structure-based systems.

Now, as in-person options increase, and as firms continue to assess the productivity rates and cost-savings associated with remote work, managers should be wary of embracing a WFA environment that becomes too lax regarding structure and supervision, and here are two primary reasons for why:

Flattened management limits employee growth.

Many benefits can be derived from having middle management positions and divisional boundaries since it establishes a chain of command, opportunities for promotion, clear lines for communication, and potential for collaboration. Moreover, supervision can aid in mentoring organizational members, and supervisors can serve as champions for employees (by providing feedback, guidance, resources, and encouragement).

Conversely, when organizations blur the lines of accountability by removing hierarchy, power simply reverts to those previously in charge since opportunities for delegation and deliberation are not evident. And absolute autonomy can lead to total anonymity within an organization, and employees who are out-of-sight will be out-of-mind from those with decision-making power.

Flattened management limits organizational growth.

Scaling is difficult to do in an unstructured environment and agility is hampered when roles and tasks are not clearly defined. And since flattened management has been known to centralize power when it comes to decision-making, diverse perspectives are absent while the work environment evolves into personal cliques rather than departmental cohorts.

Moreover, when departments and divisions are flattened or fluid, interactions and teaming are unlikely, which is unfortunate since cross-functional teaming allows for employees to learn from each other as well as feel a greater connection to the organization as a whole. The novelty of an organization and its competitiveness is derived from the people within it, and when teaming and collaboration are absent within an organization, so are the developments of new ideas and processes.

The lackluster effects of egalitarian workplace systems should serve as a warning for firms flirting with flattened management, and managers should leverage the benefits of hierarchical systems to a greater degree (as preferred by employees).

Supervisors and departmental structures are important elements for a firm’s growth model as well as an individual’s career trajectory. Therefore, firms adopting WFA policies should not equate remote flexibility with a hands-off mentality. And firms should certainly take into consideration the incentives and tradeoffs of any new policy prior to implementation (the public sector would do well to follow this same advice as one-size-fits-all policies limit options and opportunities for an economy just as it does for individuals within a company).

Henri Fayol, along with his predecessor Frederick Taylor (known as the father of scientific management), espoused coordination to be a primary function of management – and this holds true to this day, particularly given the rising interest in relationship management studies.

Collaboration is key and organizations should aim to develop managerial structures that engage, enable, and empower workers rather than institute egalitarian systems that eliminate guidance and growth and limit opportunities for the decentralization of power."

MY COMMENT

Over the longer term businesses that fully embrace work from home are going to be a disaster. It will become obvious when you look back years from now that having your work force ISOLATED AT HOME WORKING AS SINGLE INDIVIDUALS.....is simply moronic. This is not an organization.

In the end it will be the employees that suffer from this "stuff". They are the ones that will end up isolated from their employer. They will have difficulty promoting. They will have problems being recognized. In the end....they will not even be needed.

This is one of those things that souncs good in theory.....but over time....it will be proven to be a significant negative event for many businesses and especially the employees that are pushing for this to happen.

 

Since this is FED DAY.

What a Fed Rate Liftoff Means for Stocks
Historically, stocks have done well in the months after an initial rate increase.

https://www.morningstar.com/articles/1084068/what-a-fed-rate-liftoff-means-for-stocks

(BOLD is my opinion OR what I consider important content)

"Let the rate hikes begin.

The Federal Reserve is widely expected to begin raising interest rates this week for the first time since 2018, ending a period of extraordinary emergency monetary policy measures that have kept rates near zero for the past two years to stimulate the economy during the pandemic.

With inflation pressures not only remaining high but also broadening, the Fed is widely expected to raise the federal-funds rate by 0.25% on Wednesday.

While this is a significant shift in monetary policy, a rate increase this week has been so well anticipated that stock market observers don’t expect much impact from an expected liftoff. And in fact, history shows that even when the Fed starts raising rates, stocks often head higher.

“Given that this (rate hike) is so expected and widely telegraphed I don’t expect much of a market reaction,” says Paul Hickey, co-founder and president of Bespoke Investment Group, an independent market research firm based in Harrison, New York. “In the next couple of weeks, Fed policy will likely take a back seat to geopolitical concerns.”

The one potential wild card is the Fed’s plans for reducing its holdings of bonds that it purchased in order to push bond market yields down and support the economy during the pandemic-driven recession.

Rate Expectations

Prior to Russia’s invasion of Ukraine, uncertainty around the pace of Fed rate increases had perhaps been the most significant driver of volatility in the markets. Although inflation was pushing higher in the second half of 2021, prior to the start of this year, most investors expected a fairly relaxed pace of Fed rate increases that wouldn’t start until May or June.

But in January of this year, with inflation staying higher, longer, expectations began to accelerate and ramp up for the pace of Fed rate increases. Investors pulled forward the odds of a March liftoff, and as February began, the bond market began to price in a half-point increase this month.

Then came the Russian invasion of Ukraine, which led to a revision of expectations about the size and timing of what is anticipated to be steady quarter-point increases over the course of 2022.


Even though the Russian attack and subsequent sanctions against the country threaten to worsen inflation, they also could slow economic growth. In light of geopolitical developments, Fed chairman Jerome Powell said earlier this month he would support a 25-basis-point move when the Federal Open Market Committee meets March 15-16.

Powell said the Fed approach would be “careful” initially but could become more aggressive should inflationary pressures persist.

His unusually frank recommendation, made amid spiraling inflationary pressures and exacerbated by Russia’s Feb. 24 invasion of Ukraine, cemented market expectations for this week.

“The Fed has signaled pretty clearly that 25 basis points is the baseline,” says Eric Compton, equity strategist at Morningstar. “I’d be surprised if it deviated.”

For the stock market, the back and forth around expectations for the Fed were an important catalyst for the stock market’s swoon in January.


As expectations for rate increases grew, stocks--especially those for faster-growing companies trading at higher valuations--took a sharp hit. Growth stocks tend to get hit harder during inflationary times because a significant part of their allure is their future earnings profile, explains Morningstar’s chief U.S. market strategist, David Sekera. “As investors lower their growth expectations and discount those future earnings at a higher rate, the present value of the stocks falls further and faster than the broader market,” he says.

But at this point, the expectations for a quarter-point rate increase are so well entrenched, it would likely take a significant surprise for there to be a significant impact on the market.

Stock Performance and First Rate Hikes

The Fed last began a rate-hike cycle in 2015 in the aftermath of the global financial crisis. At that time, inflation was running under the Fed’s 2% target and the economy was strong. Now, policymakers are faced with a pace of inflation that well exceeds its target range combined with a tight labor market, consumer spending that continues to be robust, and the uncertainties presented by the Russia-Ukraine war.

In fact, since the Federal Reserve began tweaking its communication strategy in 1994 and more openly signaling its intentions, the market in most instances has tended to slightly underperform in the first three months following a rate hike and rebound strongly in the 12-month period.


Janet Yellen, a former Federal Reserve chair, may have helped set the stage for what the Fed will include in its commentary next week when she noted Thursday that the United States is “likely to see another year in which 12-month inflation numbers remain very uncomfortably high.”

Yellen’s remarks came following a report showing consumer prices are at their highest levels in 40 years. The Consumer Price Index, a measure of the cost of goods and services across the economy, rose to a 7.9% annual rate in February. Not since January 1982 when the CPI hit 8.4% has inflation been this high.

When it comes to monetary policy, the Fed is walking a tightrope of reining in inflation without slamming the brakes on the economy and causing a recession. Yet, long before the Ukraine invasion, inflation was running high and the market anticipated more aggressive action.

Compton adds: “The main concern is inflation. What’s happening in energy and agriculture won’t be easily controlled by the fed-funds rate. Everything else going on will be the driving force” of what happens in the market.

From QE to QT

More important, Compton says, is what the Fed says about its plans and targets for reducing the size of its balance sheet, which has ballooned to $9 trillion in assets, and the “tenor of the commentary” on current conditions. The Fed purchases--known as quantitative easing--are now expected to be followed by “quantitative tightening” beginning in May or June.


Market observers will be watching the pace of quantitative tightening closely. In many parts of the government-bond market, the Fed has effectively been the largest buyer of securities since early 2020; as it reduces its holdings, the potential is that bond prices could fall and yields go higher, which in turn could spill over into the stock market."

MY COMMENT

The only unknown is the commentary and Q&A stuff. Lets hope that the FED and YELLEN dont put their foot in their
mouth and screw up the markets. It would probably be better if they just said nothing at all.

The RAVENOUS PRESS is also a big problem. They will TWIST anything they can to fear monger and sensationalize this event.......way beyond.....what it actually is.

What it actually is........is.....a NON-EVENT for most investors and the markets.

 

In the end......by hindsight.....the rate increases will be a good thing for the markets. As to the short term....today and the rest of this week......I am looking for a nice RALLY.

 

Here is the economic data that will ABSOLUTELY be ignored today since it is FED DAY.

U.S. retail sales rise moderately in February; January revised sharply higher

https://finance.yahoo.com/news/u-retail-sales-increase-moderately-124554553.html

(BOLD is my opinion OR what I consider important content)

"WASHINGTON (Reuters) - U.S. retail sales increased moderately in February as more expensive gasoline and food forced households to cut back spending on other goods like furniture, electronics and appliances, which could restrain economic growth this quarter.

The report from the Commerce Department on Wednesday, however, showed the rebound in sales in January was much stronger than initially estimated. Record gasoline and high food prices are hitting lower-income households the hardest.

Overall, consumers are being cushioned by massive savings accumulated during the COVID-19 pandemic. Worker shortages with near-record jobs openings are boosting wages and allowing Americans to pick up extra shifts to augment their income.

"Though cooling after January's splurge, American consumers appear reasonably well positioned to keep spending, supported by recent massive job gains and high household savings," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto.

"This assumes, of course, no further major blows to fuel and food costs, confidence, and financial conditions stemming from the Russia-Ukraine war."

Retail sales increased 0.3% last month. Data for January was revised higher to show sales surging 4.9% instead of 3.8% as previously reported. Economists polled by Reuters had forecast retail sales growth slowing to 0.4%, with estimates ranging from as low as a 0.7% decline to as high as a 1.7% increase.

Retail sales increased 17.6% from a year ago. The moderate monthly gain in retail sales came ahead of an expected interest rate increase from the Federal Reserve later on Wednesday, the first in just over three years.

Retail sales are mostly made up of goods and are not adjusted for inflation. Last month, sales at auto dealerships increased 0.8%. The rise likely reflected higher prices amid shortages, as motor vehicle manufacturers reported a decline in unit sales last month. Auto sales accelerated 6.9% in January.

Receipts at service stations shot up 5.3%. Gasoline prices jumped 24 cents to an average of $3.49 per gallon in February from January, according to data from the U.S. Energy Information Administration. They have since pushed to a record high above $4 per gallon after Russia's invasion of Ukraine on Feb. 24. The war has also boosted wheat prices, which could keep food prices high.

U.S. stocks opened higher amid signs of progress in Ukraine-Russia peace talks. The dollar fell against a basket of currencies. U.S. Treasury yields rose.

UNDERLYING STRENGTH

Sales at furniture stores fell 1.0%. Consumers also cut back on spending at health and personal care stores, with sales declining 1.8%. Sales at nonstore retailers tumbled 3.7%. Receipts at electronic and appliance stores fell 0.6%.

But consumers spent more on clothing as well as sporting goods, hobbies, musical instruments and books. Receipts at restaurants and bars rebounded 2.5%. Restaurants and bars are the only services category in the retail sales report.

Excluding automobiles, gasoline, building materials and food services, retail sales fell 1.2% in February. Data for January was revised sharply higher to show these so-called core retail sales rebounding 6.7% instead of 4.8% as previously reported.

Core retail sales correspond most closely with the consumer spending component of gross domestic product. The upward revision to January core retail sales offset the decline in February, which could leave consumer spending on a moderate growth path in the first quarter.

The Russia-Ukraine war, which is also expected to further strain supply chains, prompted economists at Goldman Sachs last week to slash their gross domestic product growth estimate for the first quarter to a 0.5% annualized rate from a 1.0% pace. The economy grew at a robust 7.0% rate in the fourth quarter.

A recession is not anticipated this year as consumers are sitting on about $2.5 trillion in excess savings. Job openings at the end of January were a near record 11.3 million.

"The U.S. economy is still likely to see continued growth, though at a slower pace than seemed possible at the start of the year," said Bill Adams, chief economist at Comerica Bank in Toledo, Ohio."

MY COMMENT

The fact that consumers have MASSIVE savings built up during Covid shows the extent of the FREE MONEY that was handed out like candy. The result....total distortion of our economy.

In my view it will......STILL....be another 12-18 months for the economy to recover back to normal. As to inflation......not much impact happening to consumer spending. I dont expect the FED increases to have ANY impact on inflation for the next 6-12 months. It will take the normalizing of the economy and supply demand issues to kill inflation.

Consumers siting on $2.5 TRILLION in EXCESS SAVINGS. AMAZING. And we wonder why there is inflation and supply issues.

 

On an individual level......you milk it for as long as you can Emmett. If I was an employee nearing the end of my work life......it would be ALL about ME, ME, ME. I would work and take advantage of it for as long as I needed to.......with my TOTAL FOCUS.......being my own security and preparing for retirement. Of course.....I would not let anyone at work know that.

Now......younger people with a long work life ahead.....those working from home are going to pay a very big price....in terms of promotions and job security......as well as mental health and work skills.

Now.....one of my kids.....working in senior management, but not the executive ranks....yet......but one step away...... their company says they are going to stay remote. I tell them they had better go into the office for at least a couple of days a week.....especially if the executives are going in. If you aspire to the executive ranks....you had better go in. I am sure they are tired of hearing my views on this.

Of course....their company just had its worst year ever........they have all sorts of reasons. I told them.......perhaps you should consider the.......GIANT ELEPHANT SITING IN THE CORNER.....the fact that your entire company just worked from home for the first time in history. Fortunately my kids employees were the ONLY group that had great results.