Approaching normal  Jobless claims increased last week by 4k, but still remain at a relatively low level compared to what we’ve been seeing in the last 18 months. Unfortunately, the resurgence of COVID cases across several states has resulted in restaurants, hotels, and other services industries feeling some additional pressures but most employers are actually still trying to hire more workers in anticipation of this wave of cases passing by in the (hopefully) near future. Continuing claims, which are more indicative of a steady “unemployed” number is down to 2.86m, which is a pandemic low.  Moral of the story: The fact that COVID cases began approaching prior peak levels but…

Inflation is moderating, The Consumer Price Index increased 0.5% for the month of July. Excluding the impact of food and energy, core CPI only increased 0.3% in July, slightly below expectations for a 0.4% increase, and well below June’s 0.9% increase. On an annual basis, core inflation is up 4.3% for July (down for 4.5% in June). At the same time, the Producer Price Index increased 1% in July, after a 1% increase in June. On an annual basis, July’s PPI came in at a whopping 7.8%, which is a record high since the index was created over ten years ago.  Moral of the story: The PPI is typically a…

Looking for signs  The ISM Manufacturing Index came in at 59.5 in July, down from 60.6 the month before. Any reading above 50 indicates an expansionary environment, but this is the lowest reading we’ve seen in the index since January. The prices index came in at 85.7, down 6.4 points from June’s reading, which was the highest since July 1979. Additionally, the employment index climbed up 3 points from last month to 52.9. Meanwhile, the ISM Services Index came in at an all-time high reading of 64.1 for July. While this index also indicated improving employment, it did indicate prices continuing to increase.  Moral of the story: Both lower prices…

Making a full recovery The US economy expanded 6.5% for the second quarter, primarily driven by consumer spending, which surged 11.8% in the quarter. Business investment increased by 3% as companies resumed spending on equipment – this part of GDP would have likely been stronger had it not been for the shortages we’ve seen across the services and manufacturing sectors for supplies and labor. Those shortages actually came through in a big way as inventory levels declined $165.9b. Investments in new housing also fell for the first time in a year, another supply side issue versus an indication of lower demand (people still want to buy homes but there just aren’t…