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John Silvia, Wells Fargo chief economist, on this week’s economic data and what it means for the recovery.
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Leading indicators rising more than expected in July and reversing the zero point 4% drop we -- June.
But is this good news or her name is John Silvia chief kinds of Wells Fargo back on the show the way in John -- -- -- I do -- like there was just a tidal wave of economic data that washed over six weeks so.
Did other -- forest makes sense -- -- me is the economy didn't learn anything new about the economy this week vs last.
By that we learned that the economy has a little bit more resilience and it -- and some people had feared.
And I think -- when you look at the data leading economic indicators throughout because building permits throughout.
That suggests housing has some falling demand tell.
And we'll look at the jobless claims have come down a little bet that's also good for the labor markets I think.
What you saw on the bond market this week was a real negative reaction because the economy does have some lights and it doesn't look like the Fed's gonna do QE3.
And I think that combination really upset so the bond -- -- You know there's a big debate going on about why interest rates are inching up and a lot of people John just say it's all about Europe and that the risk is being driven.
Right adding your thing because we heard from Merkel and before heard broadly saying I'll do whatever it takes millions everything they can -- keep the Euro together I mean it's just created this bullish -- In recent weeks because of that -- do you buy into that theory.
Raising US -- -- -- I think that's part of the star announced what we look up and how weekly coming out today.
Is that the European situation seems to have settled down the trying to make.
A little bit of progress here but I think the -- rates are reacting to the reality that core CPI came out this week it was still above 2%.
The Producer Price Index came out this -- And higher food higher energy Ohio auto prices she kinda get a sense that this economy is not going into recession that that.
Part of the distribution.
In terms of market expectations are expected -- section.
What.
Some upward pressure in certain segments on inflation and -- -- We don't need to be in treasuries you wanna go into something else you're gonna participate in economic growth I.
Think that no one case on a ten year -- is still safe haven status them to agree.
I mean historic Altman yeah I think I think -- -- definitely when you're looking at the pace of economic growth and inflation.
Over time the fact if you looked at the University of Michigan consumer.
Sentiment -- -- is coming out earlier today it was -- and they're expected inflation number was over 3%.
So I'm not a I get a ten year treasury of one point eight and consumer inflation expectations at three point six -- -- That that combination tells me that the one point eight still has a safe haven bid and.
About that confidence number take interest in right -- I -- if these statistics because feet there is a no confidence sentiment it's like a self propelling proxy for any kind -- -- starting to know better -- as we approach the fall.
Well when you look at the -- and data that -- does seem to be some improvement in people's attitudes.
It's still pretty -- although -- relative to historical patterns.
But we do see a little bit of improvement.
And.
-- I like that because it just tells me that they consume on average is gonna still contribute.
To overall economic growth John thank you so much a discussion have a good weekend.
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