On Friday the 2nd revision to the Q1 GDP number came in at 0.8% annualized versus 0.5%, which was the first read. We get the last look at the end of June, although the number is revised further after that.
So the economy grew 0.2% for the quarter so far, with the last read taking into account the inventory build, which could take that number even lower and certainly depress the Q2 number.
Still the shills on the Street cite job growth as driving a more vibrant retail sales. A Federal Reserve study showed nearly half of American families could not come up with an emergency $400.
In the same study 22% of working Americans had two or more jobs. So two minimum wage jobs with no benefits is not spurring retail sales. Who would have thought?
This is why I have pointed out that retailers across the board are cutting jobs, closing stores and going bankrupt. There is a recessionary contraction happening, that will stifle any rate rise by the Fed, if it is honest with the American people. From Wal-Mart to Nordstrom and Macy’s retailers are getting creamed on sales. Discounters and dollar stores are the only stores doing well.
Using the Fed’s dual mandate, there is no economic growth and the full-employment jobs number does not mean what it use to mean. If — according the its own data — one-quarter of Americans are slinging hamburgers and then going to a second job selling slurpees, we do not have full-employment, as the Fed cites.
So what is the Fed looking at when it says the June meeting is on the table for a rate rise? Again it has more to do with bailing out the banks and the upside derivative books they have than helping the American people.
The dual mandate is now a tri-party bail out, and we should call them on it.