• HVD, fam!

    Keeping a weather eye on the horizon Even though consumer inflation is still very low at 1.4% (ideally should be near 2%), it rose at the fastest pace in five months for January. Pretty much all of this was driven by a 7.4% increase in the price of gasoline. Prices for food from grocery stores and restaurants has increased by about 4% since the pandemic and indicates shortages of some types of foods and, importantly, the costs associated with dealing with the pandemic for sellers. Taking out food and energy (which tend to be pretty volatile), core inflation was flat.  Moral of the story: The worry is that inflation will really ramp…

  • Welcome to my TED talk

    Slow starts   The January jobs report and it was…underwhelming. We only created 49k new jobs in January and the numbers reported for December and November were revised downward by 159k in total. The job gains in January were mainly in the professional services and local government education industries while the hospitality sector remains challenged and lost another 61k jobs after losing 536k jobs in December amid new waves of government-mandated shutdowns.  Moral of the story: This year is off to the slow start we had seen coming, which is why the market didn’t react negatively to this disappointing report. The market also appeared to put a greater chance of…

  • A new game in town

    New kid on the block New unemployment claims increased 847k last week, coming in well below expectations for 875k, but this remains significantly higher than the 100k-200k range we were seeing pre-COVID. The total number of Americans receiving some form of unemployment benefits increased 2.29m to 18.28m (most of that’s related to people rolling onto the unemployment funds included in the stimulus package passed in December).  Moral of the story: Unemployment continues to be an issue as government-mandated shutdowns keep fluctuating in different parts of the country. In positive news, Johnson & Johnson announced a successful single-shot vaccine (vs Moderna and Pfizer’s double shots). The US Government is expected to…

  • Mittens from Vermont

    Orders from DC  Upon his inauguration, President Biden signed 10 executive orders specifically to combat the pandemic. His plans include the intent to use the Defense Production Act (also enacted by the Trump administration for the production of ventilators and other supplies) to produce protective equipment and supplies for testing and vaccinations. The new administration is going to look to accelerate the roll-out of vaccines (100m doses in his first 100 days) by providing more funding for state and local officials and mobilizing FEMA resources to make it happen.  Moral of the story: It’s abundantly clear the real economic recovery is going to happen in lockstep with our ability to…

  • In Peach & Mint: Season 2

    Finding silver linings  New unemployment claims last week spiked to 965k (vs the 800k expected). This is the highest weekly number since August last year. Continuing claims, which is more indicative of the longer-term unemployment trend, also increased, for the first time since November. The increase in jobless claims was most acute in states with strict government shutdowns like California, where even outdoor dining is now prohibited.  Moral of the story: The December jobs report, combined with the weekly unemployment updates we’ve gotten so far in January, are clearly indicative of a struggling labor market. The one silver lining to this data is that it’s likely to generate bipartisan support…

  • Story time

    The Frog Prince Contrary to most other economic indicators, the manufacturing sector grew at the fastest pace since the beginning of the pandemic last spring (we’re about to lap a full year around the sun with this nonsense…). The ISM manufacturing index increased to 60.7 in December (anything above 50 indicates growth) and this is actually the highest level we’ve seen in almost two and a half years. Most encouraging, the employment piece of the index, which had been negative for 14 months straight, rose above 50 for the first time in October and again in December as well.  Moral of the story: This index basically measures whether things are getting better or…

  • We finally made it to 2021

    Crawling to the finish line Consumer spending fell in November, which is the first decline in this economic data point since April. Consumer spending fell 0.4% and personal incomes decreased 1.1%, indicative of the pandemic-related relief winding down. Inflation, as measured by the Fed’s preferred PCE index, was flat for the month. The core PCE index, which excludes food and energy, was only 1.4% higher on an annual basis, well below the Fed’s 2% inflation target.  Moral of the story: Consumption accounts for the majority of the US economy and what we’ve seen so far is telling us that the economy basically crawled to the finish line of 2020 (same,…

  • Goodbye, 2020

    Taking a quick break from the regularly scheduled programming to wish all of you a very happy and healthy holiday season. This will be the last digest of 2020 and it also marks two years of UnBenchd. I’m so incredibly thankful for all of you who have joined the journey, I hope it’s been as incredible for you as it has been for me. Here’s to a brighter, better, and, most importantly, healthier 2021 – cheers!  Santa’s cutting back  Retail sales fell 1.1% in November, which was a bigger drop than anticipated. Retail sales for October were revised downward to -0.1% vs the initial +0.3% reported. Sales were weaker across…

  • It’s finally happening

    The wait has begun  It’s finally happening. Vaccinations have already begun in the UK. Delivery for the Pfizer vaccine is expected to begin across the US on Monday. Approval for Moderna’s vaccine is expected to come later this week. Despite that good news, we’re literally writing history with some of the deadliest days on record happening throughout this past week as COVID-19 deaths are surging.  Moral of the story: The NYTimes published an interactive tool that helps you “find your place in line” for a vaccine based on your age, occupation, health conditions, and location. There are 144.1m people ahead of me in line across the country, including 742k people ahead of me…

  • How is it December?

    It’s not working anymore We added 245k jobs in November after adding 610k jobs in October and as many as 4.8m in June. The unemployment rate fell to 6.7%, though it’s more driven by people dropping out of the labor force all together (not a good thing). The number of workers that have been unemployed for more than six months (long-term unemployment) is sitting at 3.9m. These long-term unemployed workers represented 37% of all unemployed workers in November, which is up from just 19% in September, and compares to the historical peak in April 2010 of 45%. We’re still about 10m jobs short of pre-COVID levels, which is worse than the…

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