This economy is smoking hot.  July spending grew month over month and came in 9.3% higher than July 2019!  That’s $1.345 trillion dollars (annualized) more spending.  There’s no wonder that inventories of everything you can imagine are at all-time low levels.  AND, consumers saved money!  Consumer saved $1.7 trillion dollars last month (again, annualized).  To put this in perspective the average savings during 2017-2019 was $1.1tn.  Americans are saving at levels 50% higher than pre-Pandemic!

I am frankly astonished because this record spending and elevated saving is occurring as government transfer payments are declining.  The stimmy dollars are running out. 

Let me point out the obvious:  the Delta-variant didn’t dent the economy in July.  Maybe we see a deceleration in August but it will be from very elevated levels.  This economy is ripping and, to that end, the market is woefully underestimating how much inflation is coming to a store near you.

Risk on!

Disclosures

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