George Goncalves

Fiscal Quick-Take: Has US growth been primarily driven by fiscal stimulus and can the economy thrive with smaller dosages? See thread 🧵…

I had flagged awhile ago the Iikelihood that services disinflation could offset the tariff goods inflation.

I sent off a yellow flare on the housing market in a post a couple of weeks ago, but I now think a red flare is more appropriate. Home sales, homebuilding, and even house prices are set to slump unless mortgage rates decline materially from their current near 7% soon. That,…

This creates a challenge for the Fed. The private sector needs lower rates - particularly sectors like residential housing. But the government is growing making aggregate statistics appear healthy. That means relief may come too late for the productive economy. 7/10

The U.S. labor market looks strong, until you strip out government and health care... What’s left is a weakening private economy with falling jobs growth, hours growth, and real income. Here’s how growing government is crowding out the real engine of growth 🧵 1/10

Any tax will raise the price of the specific good taxed. This can lead to short-term price disruptions due to supply-chain reconfiguration, but it also means less is spent in aggregate. A fixed basket, like CPI, is subject to distortions created by this disruption and can show a…

Consumer demand appears to be weakening. According to NFIB, more small firms reporting that their single most important problem is poor sales. Up to 10% in June, a fresh cycle high. Weak sales first, layoffs next?

While the unemployment rate declined in June, there is some evidence that this overstates the degree of health in the jobs market. Those out of the workforce that want a job now jumped to a fresh high. Unusual to see this in a "solid" labor market.

How America's Debt Spiral Could Spark The Next Crisis youtu.be/rmVWId1Wg3k?si…

Great CNBC Documentary on how the U.S. deficit could spark a crisis… cnbc.com/2025/07/07/how…

Consumers have been cautious since the start of the year. After-inflation consumer spending has gone sideways. That’s because of the well-to-do, those in the top 20% of the income distribution who account for ≈50% of spending. They had powered spending coming out of the…

Private sector jobs (excluding education & healthcare) fell to 68% of total jobs in the economy. Normally, the private sector share of jobs falls in recessions, not expansions. The labor market gains continue to be dominated by government, and quasi-government jobs.

It was such a strong payroll report that the index of aggregate hours worked in the private sector actually declined.

The big picture on jobs: The labor market is frozen unless you work in healthcare or education. 1) Unemployment is low (4.1%). 2) But the labor force is also shrinking as people retire or stop looking for work. 3) The Fed isn't going to panic about any of this. The job market…

Adding to the debt and claiming we’ll ‘grow our way out’ makes no sense—because it’s the debt itself that’s constraining growth. You can’t escape by digging deeper.

The June jobs report reaffirms the view that the job market continues to throttle back. Payroll employment increased 147k, beating expectations, but only because of a 73k increase in state and local government education. This isn’t reality, but a seasonal adjustment problem due…

Employment market boom #MacroEdge

🇺🇸US Flows come & go – likely driven by performance not outright USD diversification After a recent trend of strong demand for US assets as part of the “US exceptionalism” one-way trade fever, April actually saw the largest selling of all types of long-term US securities by…

👇@MBjegovic is spot on here👇