Stocks Buoyed By Solid Consumer Indicators

The widely anticipated recession is still MIA. That's one reason why stocks have rebounded smartly since October 12, 2022, which was the end of the latest bear market in our opinion. It's hard to have a recession when consumer incomes are rising and they are spending more on both goods and services (chart). Inflation-adjusted incomes are rising because employment gains remain solid. Just as important is that wages have been increasing faster than prices in recent months, which may be a sign that productivity may be making a comeback after getting clobbered by the pandemic.

Consider the following: