Apollo: This Is a Soft Landing

Looking at the incoming data, the facts are the following:

1. The unempolyment rate declined in August, and looking at the establishment survey and the household survey, it is difficult to see strong signs of a slowdown in job creation.

2.Wage growth accelerated to 3.8% in August and wage growth remains sticky well above pre-pandemic levels.

3. Daily data for debit card transactions shows that consumer spending has been accelerating in recent weeks, driven by spending on clothing, food services and drinking places, sporting goods, and motor vehicle and parts dealers.

4. Weekly data for retail sales went up last week and remains solid.

5.jJoblessclaims have declined for several weeks.

6. Continuing claims have declined for several weeks.

7.Default rates and weekly bankruptcy filings are trending down.

8. The Fed’s weekly GDP model suggests GDP is 2.4% and the Atlanta Fed GDP Now says GDP this quarter will be 2.1%.

9. Weekly data for S&P 500 forward profit margins shows that profit margins are near all-time high levels.

10. The stock price of staffing firms is rebounding, which suggests that we could get a rebound in job openings

The bottom line is that the US economy is not in a recession, and there are no signs of a recession on the horizon.

All the picture below credit to Apollo Chief Economist - Torsten Slok