Inflation Threatens and Evictions Loom

Two major issues dominated the news in late July: Inflation – whether it is, is not a problem or is likely to be one; and the prospect that millions of renters would be evicted from their homes as a federal moratorium barring evictions for nonpayment of rent expired. 

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Recession fears, which had been inching higher, receded somewhat in October, as employment growth, low interest rates, and signs of life in the housing market offset concerns about a decline in manufacturing activity, anemic business activity, and slower worldwide economic growth.

“Disappointing.”  That’s a description that hasn’t applied to the U.S. employment growth in a long time.  But the Department of Labor’s August employment report fell well short of predictions, adding to concerns that the economy may be slowing and firming expectations that the Federal Reserve (Fed) will continue slashing rates in order to forestall what some see as a growing risk of recession. 

The recession concerns that have been humming quietly in the background grew louder this month as the hiring pace slowed and some key economic indicators slid.  Employers added 136,000 jobs in September and the unemployment rate (3.5 percent) hit a 50-year low.

The Federal Reserve’s decision to cut rates by a quarter-of-a-point this month didn’t surprise anyone – but it also did little to satisfy either critics (including two Fed dissenters) who thought the reduction  was unnecessary (and possibly harmful) or President Trump, who has been demanding larger cuts to boost economic growth.