Jobless claims Jobless claims came in higher than expected last week with 419k new claims, well above expectations for 350k. This is higher from last week’s 368k print, which was also unfortunately revised upward. This is the highest report of jobless claims we’ve seen since mid-May. Unsurprisingly, Michigan saw the highest increase in new jobless claims as semiconductor shortages have caused significant delays in auto manufacturing – a big industry for jobs in the state.  Moral of the story: Stocks took quite a tumble on Monday as concerns about the delta variant (i.e. news of LA reinstating a mask mandate indoors…indefinitely) impacted investor sentiment. Though stocks have made a full recovery since…

Inflation is real Consumer prices were 5.4% higher in June compared to the same time last year, which is the largest CPI print we’ve seen since the summer of 2008. Core CPI, which excludes food and energy, increased 4.5%, which is the largest print since September 1991 (that’s literally before I was born, it’s baby’s first high-inflationary period!). Prices are rising for consumers because they’re higher for producers. June’s PPI print came in at a whopping 7.3%, which is the highest annual increase on record for the index.  Moral of the story: Expectations were for inflation to come in hot this month, but reality was quite a bit more aggressive. The longer…

Rock steady Meeting minutes from the latest Fed meeting effectively reiterated the Fed’s view that even though inflation is coming in higher than they had initially expected, they still see it to be transitory in nature. Before they start raising interest rates, the Fed would ease off on their policies that impact the money supply in the market, and there’s only limited talk about doing even that at the moment.  Moral of the story: Despite the economic recovery occurring today, the overall tone from this meeting was that conditions haven’t met the “substantial progress” the FOMC is looking for before starting to take their foot of the gas pedal.  Falling…

All the confidence in consumers  Consumer confidence increased to 127.3 for June, its highest level since February 2020, driven by the improvement in the labor market and optimism about the economy reopening. Consumers are showing strong demand for not only services as travel demand surges but also continued spending on capital goods (cars, appliances, etc.) and homes. Moral of the story: Consumer savings increased an incremental $2T during the pandemic and people are ready to spend. Consumer spending, which accounts for nearly two-thirds of the economic activity in the US, was largely focused on goods during COVID since services were basically all shut down. What this month’s survey shows is…