Central Banks Can’t Taper in this Slowdown
Recent macroeconomic data from the United States should worry us. Amid the reopening and the biggest fiscal and monetary stimulus in recent history, and with all the possible tailwinds from policy decisions, consumer confidence has plummeted to the lowest level since 2016.
Retail sales have fallen sharply again in July, and the employment or industrial production data are far more than disappointing considering the level of stimulus and that GDP has returned to prepandemic level.
The use of industrial capacity, at 76 percent, is 4 percent below the average for the 1972–2020 period, and the labor participation rate, at 61.6 percent, has been stagnant for ten months and at 1980 levels.
The total savings rate as a percentage of disposable income has almost vanished from 33.8 percent to 9.4 percent.
Let’s put it in the context of a reopening that has been in place for more than a year, a
Article from Mises Wire