Tuesday, October 15, 2019
The consumer is still alright
- by New Deal democrat
Way back in 2007, I wrote an article at Daily Kos entitled “Are hard times near? The great decline in interest rates is ending,” in which I highlighted the importance of debt refinancing at lower interest rates as an important way that the working and middle classes had dealt with stagnating wages since 1980. Whenever that spigot was turned off, as well as the ability to cash in appreciating assets, was when a recession happened.
I wrote then that there was still room for one more refinancing. And that proved true, as mortgage rates in particular declined to yet lower new lows in 2012-13. When it comes to mortgage rates, they still have not made new lows in the 6 years since.
Especially since, like 2015-16, manufacturing has rolled over, but low mortgage rates are helping the housing market rebound again, this was a good time to update the framework I first wrote about in 2007, which I’ve come to call the “consumer nowcast.”
So, what does the consumer nowcast tell us about that 70% of the US economy? I updated this system in a post over at Seeking Alpha.
As usual, clicking over and reading helps reward me with a little pocket change for my efforts.