Thursday, November 19, 2015

Chart That Could Decide the 2016 Election And it doesn’t look great for Democrats.

New Republic ^ | November 18, 2015 | David Dayen 

At first glance, the economy appears to be in a decent position to chug along or even improve—and bode well for the Democrats in 2016. But that first look may be deceiving.

To the extent that real-world events...

[snip]


Fortunately for Democrats, the Federal Reserve predicts 2016 growth at 2.4 percent, in line with other economists’ projections. Unemployment has fallen to the lowest rate in seven years. With threats of a debt-limit default or government shutdown (mostly) contained, self-inflicted wounds from Washington are unlikely. At first glance, the economy appears to be in a decent position to chug along or even improve—and bode well for the Democrats in 2016.


But that first look may be deceiving. When I want to understand future economic trends,...

[snip]

The chart measures the ratio between business inventories and sales. A higher ratio means that inventory is building up nationwide; a lower ratio means that consumers are snapping up goods as fast as they’re being produced.

[snip]

It’s important to note that slow growth in 2016 is not a consensus view among economists. You can envision a scenario where a banner holiday season depletes inventories, where job growth finally leads to higher wages, where consumers finally use the extra cash from low gas prices—and where any fears blow over. But if a generally on-target economist like Baker sees a low-growth story unfolding in 2016, it’s hard to completely dismiss it. And that should raise alarm bells at DNC headquarters.
(Excerpt) Read more at newrepublic.com ...

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