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Bonds Take in Stride Mixed Signals on Economy
The U.S. economy is sending confusing signals. Private sector employment is still 7.6 million jobs below its peak (Figure 1) but inflation rates have soared to their highest levels in over a decade (Figures 2 and 3). Retail sales and durable-goods orders are off the charts (Figures 4 and 5) even as supply chains are entangled in pandemic-related bottlenecks. The Federal budget deficit has expanded to a post-World War II record of nearly 20% of GDP, is roughly twice its size at the height of the global financial crisis, and about four times its largest deficits from the Reagan era (Figure 6). charts Yet amid these ... (full story)