Shelton Capital Management | Real Investment Insights

August Monthly Review and Outlook

Shelton Capital Management

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Beneath the Headlines: An Economy in Transition, Not in Trouble

Key Takeaways
» The July jobs report headline (-23,000 payrolls and a combined -103,000 in prior-month revisions) glanc-es over a more nuanced picture: layoffs remain his-torically low and job openings remain plentiful. This looks like a labor-supply problem, not a demand setback. Still, the situation bears watching closely.

» All four dimensions of our Recession Tracker are pos-itive for the first time in months as real personal income turned positive year-over-year in June. The aggregate risk level remains Green | Low Risk.

» Headline GDP (+1.5% in the second quarter) contin-ues to understate the underlying economic momen-tum. Real Final Sales to Private Domestic Purchas-ers, the cleaner read on core private demand, accel-erated to +3.9%, up from +1.7% in the first quarter, according to initial estimates.

» Late-July's Iran-driven volatility (the VIX Index rose +25% and oil jumped to $92/bbl) followed the same pattern we have seen repeatedly: a buying oppor-tunity rather than a trend change, and markets have since staged a V-shaped recovery.