Is the U.S. economy seeing a soft landing, or is it still too early to say? In the November Numbers that Matter Live (recording below), Economics Editor Bill Wood shared his thoughts on plastics markets and the economy.
Strong employment data and a rising stock market may be masking some problems, which makes it difficult to predict the future.
Wood doesn’t expect interest rates to go higher, but the labor market may still see some contraction.
“Higher interest rates are having an effect. Do they need to raise them more? I don’t see any reason to raise them more,” he said. “The long-term goal is to get them to a level that’s neutral. For a long time — for the 10 years or more leading up to the crisis — interest rates were way too accommodating. And now they’re restrictive. That strategy seems to be working.
“But when will the wheels officially touch down and we get to say, ‘OK, that’s restrictive enough. Let’s start to ease off the ease off the brakes and add a little more fuel.’ That’s going to be several months.
“We haven’t gotten to the 2 percent inflation target that the Fed wants. And it has to be a sustainable 2 percent. Not just touch it once and then take off again. And part of the reason for that is the employment data and the jobs figures, the labor market is still holding up, which is you know, it’s almost a Goldilocks scenario. There are not a lot of people losing jobs, there’s a net gain in jobs still,” he said.
Other topics included the impact of the auto strike, retail sales, inflation and differences between the North American and European economies.
The next Numbers that Matter Live is scheduled for Jan. 30. In the meantime, watch for Numbers Matter Shorts, which aim to keep readers informed about plastics and economic trends in a timely, entertaining way.