These 4 indicators suggest the US is headed for the 'promised land' of a rolling economic expansion
A market expert, Ed Yardeni, believes that the US is making progress towards economic growth. Yardeni presents four positive economic markers that support his position that the US is more likely to expand rather than face an economic decline. He also remarked that those who are constantly warning of an upcoming recession will have to change their predictions.
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Ed Yardeni, an experienced market expert, predicts that instead of a recession, the United States economy will experience a continuous expansion, leading it to a prosperous "promised land."
This idea goes against the belief of many economists who are predicting an economic downturn due to a decrease in consumer spending and the continuous tightening of the Federal Reserve.
Yardeni pointed out in a note on Tuesday that four economic measures are getting better, which suggests that certain aspects of the economy are improving more than some cynical investors believe.
Yardeni stated that the permabears would need to delay their anticipated recession once again because of the recent set of US economic signs. These signs indicate that our "continuous decline" is becoming a "continuous growth" instead.
Yardeni is extremely thrilled about these four economic indicators.
"Real Estate Market Trends"
According to Yardeni, the housing sector is making a good comeback after suffering a setback due to high mortgage rates reaching 7% in the past year. In the month prior, there was a notable increase of more than 20% in housing construction starts and new home purchases saw a significant boost as well. This is a positive indication for the overall state of the economy.
According to Yardeni, construction workers are hurrying to create additional products to meet the high demand that has been building up. The sales of recently constructed houses have been escalating to levels comparable to those before the pandemic.
"Revamping Manufacturing: Bolstering The Sector"
New studies from the Federal Reserve revealed a surge in operation, with a 1.7% rise in new orders for goods that were produced in May, continuing a three-month upward trend.
One noteworthy statement from the Dallas Fed Manufacturing Survey was made by a corporation in the field of computer and electronic products. This statement provided an explanation for why the manufacturing industry isn't plunging into a recession.
The statement conveyed that their plan is to increase their workforce and undertake a substantial investment plan. This is to ensure that they are prepared for the inevitable economic recovery following the recession that is being anticipated by many individuals.
Having such a mindset, which involves getting ready for the unavoidable economic downturn, is benefiting the industry of producing goods.
Yardeni stated that the general business indexes of the regional business surveys conducted by five of the 12 Federal Reserve district banks increased in June. This indicates that the manufacturing recession may have reached its lowest point.
New information indicates that customers are feeling more positive about their economic situation, and this may result in a continuation or even an upsurge in their shopping habits in the upcoming months.
Yardeni reported that The Conference Board expressed the consumer confidence index ascended to 109.7 this month, reaching the highest level since January 2022. The inquiry utilized to establish the CCI demonstrated that the 'jobs plentiful' collection retained an elevated figure of 46.8% throughout June."
Disinflation Indicators
Yardeni pointed out that current information displays a decrease in inflation as it moves through the various supply chains. This decrease in inflation can assist in keeping it under control, allowing for the Fed to have some leeway in making future decisions regarding interest rates.
According to Yardeni, the reports from the five Federal Reserve district banks show that there has been a significant decrease in inflationary pressures, which is reflected in the June averages of the prices-paid and prices-received indexes based on regional business surveys.
According to Yardeni's analysis, the S&P 500 may reach 4,600 by the end of the year, which could mean a rise of 5% from its current position.
According to Yardeni, the market is not extremely cheap right now and he's not encouraging everyone to buy it. However, he believes that the market's future looks promising from a fundamental point of view. It is unlikely that the economy will experience a recession on a large scale. Additionally, as we continue to observe more indications of growth within the economy, Yardeni predicts a technological boom that will increase productivity and lead to a thriving market reminiscent of the 1920s. CNBC reported this on Tuesday.
