🧭 The Weekly Scoop

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Here’s what you need to know this week.…

It was a pretty slow week, but the most exciting news came from Target. For months, we’ve been talking about the optimistic path for a rebound being some short-term deflation (stuff getting cheaper) as wages catch up to the inflated cost of living. It’s happening!

Companies lowering prices is usually a no-no. Economists are trained to see deflation as a problem because when it lasts for a long time, it usually is. However, as I’ve mentioned in recent months, we’ve had such rapid inflation that a short period of deflation might actually be a jolt to growth. We saw that play out this week for Target. After several quarters of raising prices, they decided to discount thousands of items. They sold more stuff, earned more revenue, and increased their profit expectations for the year. Making basic goods affordable turns out to be good for business. Who would have thought?

Meanwhile, wages have grown faster than the broader cost of living for several months straight, providing people with a little more purchasing power.

This is all happening while borrowing costs start to come down. We could be at that slow pause before a steeper downturn, and there are plenty of things that could break or pop, but some of these signals are giving more of a rebound vibe.

More strikes, higher wages, more competition, and more discounts. That’s an optimistic path forward that’s currently underway.

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