The economy is just getting stronger, not weaker, and ‘we in the economics profession need to look ourselves in the mirror,’ top analyst says
One of the most closely monitored voices in Wall Street, presented a sharp message to peers and policy makers: the American economy does not stumble – it is accelerating. Torstein Silok, chief economist in the Apollo Global Administration, said that an imminent slowdown was repeatedly wrong, and the economy profession must start to believe with its bad record.
“The consensus has been on a mistake since January,” Släk said in a memorandum distributed to customers on Wednesday morning, adding that the average economists’ expectations that the American economy will slow down for nine months in a row: “But the reality is that it simply did not happen … We are in the profession of economics need to look at ourselves in the mirror.”
Growth challenges expectations
GDP in the second quarter expanded at an annual rate of 3.8 %, which is amazingly strong, given the ongoing efforts of the Federal Reserve to reduce inflation. The GDP in Atlanta Virus indicates that growth may be stronger in the third quarter, which predicts 3.9 %. Many economists expected the late effect of high interest rates, the most strict credit conditions, and the shock of the “Liberation Day” market in April to withdraw growth useful now.
Instead, the data tells a different story. Consumer spending continued to prove flexibility, and may enhance commercial investment, away from the decline, in the sectors associated with artificial intelligence, energy infrastructure, and the re -manufacturing manufacturing. Housing, which is often sensitive to interest rates, showed sudden stability in the main regional markets. SLUNG did not dive into these details in the Wednesday edition of the daily spark, except for the process of slowing the growth of job growth. “This is the result of slowing migration,” he wrote, not economic weakness.
“The bottom line is that the American economy is still noticeably flexible,” Släk. “It has become increasingly difficult to say that we are still awaiting delay in the late negative effects of what happened six months ago,” in reference to the day of the liberation of President Trump and the imposition of a sweeping mutual tariff. One of the leading analysts was arguing for years that most Wall Street was wrong, and that the liberation day represented the end of the beginning, instead of the beginning of the end.
Current trading recovery?
Mike Wilson, the chief American stock strategy in Morgan Stanley, formulated a phrase to describe what is happening in the economy for about three years: “trading stagnation”. The economy was quietly wandering in stagnation -like conditions from some time in 2022, and Wilson has argued all the time, with a recession that is not captured through traditional measurements, but rolled through different segments of the economy, one at a time. Wilson claims that major numbers such as GDP and unemployment are absent from serious conflicts, including 80 % collapse in employment during summer and continuous negative average growth.
Although he did not notice that he was nor wireless how their readings intersect the economy, Wilson believes that the economy last spring – with the suppression of the White House liberation day on customs duties. He pointed out that federal workers are the one field that was not affected by the tragic stagnation, until the initiative of Elieon Musk Dog was greatly suspended.
In early September, Wilson argued that the report of the weak jobs for the month of August, which was just released, provided “additional evidence of our thesis that we are now moving from the recession circulating to circulating recovery.”
“In short, we enter an environment in the early cycle, and the FBI will be a key to the next station of the new bull market that started in April,” Wilson wrote.
The job report did not come out in September yet at this time of publication, but on Wednesday, the ADP’s special salary report showed a job loss for the month of September and a review to a negative area in August. Bill Adams, the chief economist of Comerica Bank, noticed in a statement to luck This result was worse than expected, as ADP has now reached a decrease in three of the past four months. By commenting on the other news on Wednesday, the government was closed again, for the third time during the era of President Trump, Adams indicated: “The ADP report usually plays a second violin to report government jobs, but it is more important while the closure delays government data.” In other words, the recovery circulating in the prosperous stock market appears, but not in the labor market. In September, Federal Reserve Chairman Jerome Powell indicated that it is an “low -renal, low -fire” environment.
What does it mean to investors
For markets, SLonal diagnosis carries important effects. If the economy is not weakening, but reinforcement, the expectations of inflation may tend up. The basic inflation has declined from its highest level in 2022, however Släk warns of strong growth along with the easiest monetary policy position that may revive price pressures.
“The upper risk of inflation is increasing, especially if the federal reserve continues to reduce prices,” Släk wrote on Wednesday.
In September, the Central Bank continued its first years in years, indicating confidence that inflation was returning towards the target. Since then market prices are in additional discounts in the next quarter. In fact, on September 30, Släk argued “strong economy, inflation is high”, pointing to 12 different databases (including tourism levels and a large number of visits of the Freedom statue). Then he issued a possible bold call in the light of ADP data the next day, under the pretext of consensus from the next job report, which includes 50,000 salary statements that were “very pessimistic”.
However, SLUNG’s sharp statements have not been directed to policymakers or markets, but in the same prediction society. By frequently predicting the weakness that has never reached, economists undermined their credibility.
2025-10-01 18:36:00
