Source: Federal Reserve Bank of New York
Torque present elsewhere in the U.S. economy is evident in numerous data:
1) Non-farm productivity: Best 3-quarter gain in 51 years, indicating a stretched workforce
2) Temporary employment: 5-month gain of 276k workers, or 16.5%, the fastest pace ever
3) Delivery speeds are slowing within the ISM index
4) The business inventory-to-sales ratio is a hair away from its all-time low, set in January 2006.
These cyclical tailwinds are culminating following a year’s worth of positive influence from improving data on the value of risk assets.
If as it looks likely, this torque leads to employment gains, gains in risk assets will of course be reinforced.
In this second phase, more serious expectations for an old-normal styled economic recovery will be entertained. It will take several months of employment gains to convince large numbers of market participants, but these months of gains do not seem far away anymore. Structural challenges will of course remain, and these will be seen once the cyclical rebound ebbs.
More: Click for Latest Economic coverage ...