Summers Says Job Report Is a Step Down Road to US Soft Landing
Comment of the Day

September 01 2023

Commentary by Eoin Treacy

Summers Says Job Report Is a Step Down Road to US Soft Landing

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Summers also reiterated his concern about the widening US fiscal deficit, and the need for Washington to wrestle with raising the government’s revenue over time. One reason why the economy has been so strong in the face of high interest rates has been a fiscal swing of “perhaps 3%” of gross domestic product this year compared with 2022, he said.

Shutdown Warning

“It would be helpful if we could get to more realistic views about the fact that we’re going to need more revenues,” he said. He also warned lawmakers against failing to enact annual appropriations bills that are needed to keep the federal government funded after the start of the new fiscal year on Oct. 1.

A shutdown caused by an impasse over spending bills “doesn’t save any money, and further serves to disillusion people with Washington,” he said.

Eoin Treacy's view

The hiring and wage figures were encouraging today while inflation figures remained elevated in the Wednesday report. That gives the superficial impression that inflation will been overcome as hiring moderates. This is where the backward nature of economic figures and the forward looking nature of markets comes into conflict.

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