The trade gap is widening while GDP has been strong.
GDP is buttressed and skewed by tariff fears causing a lot of buying. While GDP is net of imports- it takes people and costs to get these goods into the country, from ports to warehouses, into warehouses, and into inventory- so businesses have to spend.
The jobs figures are so strong for October due to holiday hiring; these are not long-term jobs. Also, as government spending grows, government jobs are increased.
Consumer spending, GDP, and job numbers are both higher, in part, because of health care. These can also be low paying jobs (just ask nurses), which may be one reason why wages stay pretty stagnant. Health care spending is a “cost” for consumers. It is like a tax that prevents other spending.
GDP includes government spending- which grows and grows.
ISM data shows business capital spending is down- and so is energy and electricity spending, which is related.
Earnings have been supported by tax cuts.
Going forward, interest rates are rising, housing has been slowing, company margins are contracting due to interest rates, wages, and tariffs.
I’d watch municipal debt that is used to build things like schools and that do not allow localities to pay debt. It’s a nice idea- but it doesn’t pay the bills.
These are the facts.