Submitted by David Stockman via Contra Corner blog,
You have to wonder whether there are any carbon units left in the casino. The robo traders and HFTs, of course, have an attention span of 10 milliseconds. So their utter lack of concern about context, fundamentals and history is readily explainable. They never get around to it.
In the past few months, the Bureau of Labor Statistics has gone out of its way to show that U.S. worker compensation is finally rising. There is one problem with that: while that may be true on an hourly basis...
... on a weekly basis, the picture is vastly different. What is happening is that weekly wage growth have gone nowhere in years, but because the average hours worked per week has declined and today hit a 2 year low of 34.4, it translates into more money per hour worked.
Earlier today we said that following the abysmal January spending data revision as shown in the chart below:
... that "the Atlanta Fed will have no choice but to revise its Q1 "nowcast" to 1.0% or even lower, which would make the first quarter the lowest quarter since the "polar vortex" impacted Q1 of 2015, and the third worst GDP quarter since Q4 2012. It means one-third of already low Q1 GDP growth has just been wiped away."
It was "even lower."
Some time in the second week of February, when the market was tumbling on, among other things, fears of a U.S. recession, the Atlanta Fed was scrambling to give the all clear signal on the US economy when it surprised watchers by releasing a far stronger than consensus Q1 GDP nowcast of 2.7%.
In recent weeks, status-quo maintainers have pointed to The Atlanta Fed's GDPNow forecast's resurgence as evidence that the market is just being irrational and that everything is awesome after all. Since we first brought the world's attention to this real-time forecast of US economic growth it has become closely-watched by all...