No Landing

The US economy refuses to land. After March's strong retail sales report was released today, the Atlanta Fed GDPNow tracking model showed Q1's real GDP rising 2.8% (saar), an upward revision from 2.4% as real consumer spending was revised up from 2.9% to 3.4%. That's neither a hard nor a soft landing. The US economy is still flying high. That's because consumers didn't get the recession memo. They keep spending because real disposable income is rising, more Americans are retiring and have the means to do so comfortably, and six million or more "newcomers" are consuming here rather than south of the border.

Today's better-than-expected retail sales report showed a 0.7% m/m gain. Excluding autos, it rose 1.1%, as did the control group which is used to calculate consumer spending in GDP. The latter rose to a new post-pandemic high on an inflation-adjusted basis (chart).