by John Rubino
Dollar Collapse
Conventional wisdom holds that the U.S. economy is overheating. New workers are virtually unavailable, raw material costs are soaring, and of course financial asset prices are in the stratosphere. And that’s why the Fed has to tighten aggressively.
This is a compelling argument since most of the stats backing it are real.
However … all of the above might soon become obsolete in the face of dramatically slowing growth. The jury is still out, but the latest reading on the Atlanta Fed’s GDPNow real-time growth measure is pretty grim.
The blue line on the following chart represents the consensus of top economists, while the green line is GDPNow’s growth rate based on the most recent numbers. The latter is brutal, as close to zero as it’s possible to get. But – much more important – even the higher consensus growth rate is too low for the “overheating” thesis. And it’s trending down.