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Market Commentary: Inflation Could Be On the Horizon, Service Businesses Make a Comeback

Market Commentary

Market Commentary: Inflation Could Be On the Horizon, Service Businesses Make a Comeback

 Producer prices climbed 4.2% last week (Figure 1). Energy prices contributed to the largest gain since the index rose 4.5% in September 2011. The jobs market continues to see a high level of initial jobless claims while steady progress is being made in reducing the number of unemployed receiving continuing benefits. Last week initial claims rose 16,000 to 744,000 and continuing claims dipped by 16,000 to 3.7 million.

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Market Commentary: Inflation Could Be On the Horizon, Service Businesses Make a Comeback

Market Commentary

Market Commentary: Inflation Could Be On the Horizon, Service Businesses Make a Comeback

 Producer prices climbed 4.2% last week (Figure 1). Energy prices contributed to the largest gain since the index rose 4.5% in September 2011. The jobs market continues to see a high level of initial jobless claims while steady progress is being made in reducing the number of unemployed receiving continuing benefits. Last week initial claims rose 16,000 to 744,000 and continuing claims dipped by 16,000 to 3.7 million.

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Market Commentary: Jobs Market Shatters Expectations, Housing Prices on the Rise

Market Commentary

Market Commentary: Jobs Market Shatters Expectations, Housing Prices on the Rise

The U.S. jobs market roared back to life in March. The economy added or reclaimed 916,000 jobs, shattering expectations of a 150,000 increase. Workers being recalled or hired to fill openings at restaurants and bars contributed 176,000 jobs to March’s gains. Previous months were revised higher by 156,000.

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Market Commentary: Personal Income Fell in February, Stimulus Clouds Underlying Economic Health

Market Commentary

Market Commentary: Personal Income Fell in February, Stimulus Clouds Underlying Economic Health

 Slow improvement in economic data is being masked by the surging nature of government support. The gush of personal income growth in January was followed by a 7.1% decline in February. March will likely surge again with the latest round of stimulus. Employee compensation, which excludes government payments, was flat last month and has increased 0.2% over the last year.

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Market Commentary: Retail Sales Fell After January Stimulus Surge, Don’t Expect Interest Rate Hike

Market Commentary

Market Commentary: Retail Sales Fell After January Stimulus Surge, Don’t Expect Interest Rate Hike

Retail sales were unable to keep pace with a stimulus-induced surge. Retail and food service sales dropped 3% in February after spiking 7.6% in January. The January data was revised 2.3% higher than first reported. Core retail sales, which exclude autos, gasoline, and restaurants, fell even farther, dropping 3.4%. Over the last year, core retail sales have increased 10.7%.

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Market Commentary: Biden Signs Stimulus Bill, U.S. Surpasses 100 Million Vaccine Doses, Recovery Continues

Market Commentary

Market Commentary: Biden Signs Stimulus Bill, U.S. Surpasses 100 Million Vaccine Doses, Recovery Continues

Events are aligning to give the U.S. economy a big boost. The Biden administration approved a $1.9 trillion stimulus package that will provide immediate relief to millions of American households. Last week the U.S. surpassed 100 million vaccine doses, and expectations are the U.S. will be vaccinating all age ranges by mid-late April.

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Market Commentary: Monthly Job Growth Exceeds Expectations, New Stimulus Bill Advances

Market Commentary

Market Commentary: Monthly Job Growth Exceeds Expectations, New Stimulus Bill Advances

The U.S. economy returned to rapid job growth last month as fewer new COVID cases and loosening restrictions increased demand for labor. Restaurants and bars accounted for more than half the net gains, as employment in this hard-hit sector increased 286,000. Despite efforts to reopen schools, government employment dropped last month.

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Market Commentary: Vaccine Distribution, Stimulus Package Driving Economic Growth Estimates

Market Commentary

Market Commentary: Vaccine Distribution, Stimulus Package Driving Economic Growth Estimates

The impact of government stimulus checks continues to permeate economic data. Personal income rose 10% in January, and disposable income rose 11.4%. Where did the money go? It primarily bought goods or was saved. Goods spending rose 5.8% in January, and the personal savings rate jumped to 20.5% from 13.4% the previous month (Figure 1). Limits on activity continue to pressure services spending, which rose only 0.7%.

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Market Commentary: Stimulus Fuels Retail Sales as Strong Housing Market Faces Hurdles

Market Commentary

Market Commentary: Stimulus Fuels Retail Sales as Strong Housing Market Faces Hurdles

American consumers put their stimulus checks to work last month. Retail and food service sales rose 5.3% in January, after declining 1.0% in December (Figure 1). Compared to one year ago, sales are 7.4% higher. The strong data resulted from the stimulus checks and declining virus cases. Because of restrictions and risk, the biggest winners were online retailers. Home improvement stores also experienced strong demand as consumers continue to spend extra time at home.

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Market Commentary: Despite Initial Worry, Inflation Remains Well Controlled

Market Commentary

Market Commentary: Despite Initial Worry, Inflation Remains Well Controlled

 U.S. inflation rose 0.3% last month and is now up 1.4% for the year (Figure 1). Investor concern about inflation has increased in recent months against the backdrop of large stimulus packages and hopes of an economic recovery. Pushing back against that concern is a slowly recovering labor market. Initial jobless claims fell 19,000 from the previous week but remained stubbornly close to 800,000. Continuing claims were more than 4.5 million.

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