This month Jason Weaver discusses the stay at home growth, inflation and the H.O.P.E framework.
GROWTH
GDP is the key indicator of economic growth and activity
Q1 & Q2 2022 decreased at rates of -1.6% & -0.6% respectively
Most recessions need 2 negative quarters of growth and 0.5% uptick in unemployment
The Federal Reserve’s GDPNow forecasts projects Q3 GDP to be +2.9% (as of 10/19/2022)
INFLATION
CPI is the most commonly cited measure of inflation
CPI uses a basket of goods and services to track price changes for consumers
Economist focus on Core CPI to measure the underlying trend in inflation
Core CPI excludes food and energy
Inflation remains at 4 decade highs and continues to weigh on economic growth and household budgets
H.O.P.E. FRAMEWORK
HOPE gives a roadmap for how the Economy responds to changes in rates
H = Housing
1st to slow and serves as a great leading indicator
O = Orders
2nd to slow and tracked with ISM data
P = Profits
3rd to slow tracked as companies report earnings
E = Employment
Last to slow, usually the most lagging part of the economy
