Thoughtful Money with Adam Taggart Lacy Hunt: It's Not Inflation But DEFLATION That's The Real Threat To Our Economy
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Jan 30, 2025 Lacy Hunt, Executive Vice President and Chief Economist at Hoisington Investment Management, shares his deep insights into the current economic landscape. He argues that deflation, rather than inflation, poses the real threat to our economy. Hunt discusses the potential inaccuracies in inflation data and the alarming rise in factory idleness. He also highlights the impacts of recent monetary policies and tariffs on trade dynamics, predicting rising unemployment and challenges for monetary stability ahead.
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Global Economic Challenges
- The global economy, including the U.S., faces structural and cyclical challenges.
- Declining global capacity utilization, a leading indicator of unemployment, suggests further labor market difficulties.
Monetary Restraint and Capacity Utilization
- Global capacity utilization leads global unemployment and influences supply costs.
- Negative detrended real money growth and high lending rates suggest continued monetary restraint.
Consumer Distress and Data Discrepancies
- Discrepancies between payroll data and the Quarterly Census of Employment and Wages (QCEW) raise concerns about income overstatement.
- Consumers are financially stressed, indicated by low savings, high credit card debt, and rising delinquencies.