Insights

 Two U.S. economic reports provided reassuring news about the economy. The inflation trend moderated in August. Consumer price inflation (CPI) rose 0.3%, down from 0.5% the previous month and below estimates of a 0.4% increase (Figure 1). Excluding food and energy, prices increased just 0.1%.

July job openings increased to 10.9 million, up 779,000 from June. The record number suggests weaker August job growth was partly related to a low supply of workers and demand for workers remains robust.

 The U.S. economy produced just 235,000 new jobs in August, missing expectations of 725,000. Unemployment dipped to 5.2%. Average hourly earnings rose 0.6%, partly because wages continue to rise more rapidly compared to the pre-pandemic pace.

 Federal Reserve Chair Jerome Powell joined the chorus of Fed officials signaling the U.S. central bank would reduce its bond-buying program designed to keep long-term interest rates low and sustain the economy during the pandemic. After two strong jobs reports and generally positive econom …

The benefits provided by recent stimulus packages seem to be fading. U.S. retail sales dipped 1.1% last month and have now declined in two of the last three months [Figure 1]. Declines in motor vehicle and online purchases led the fall. Restaurant sales grew 1.7% in July and continue to reb …

Core inflation moderated significantly last month, rising only 0.3% after jumping 0.9% in June. Used vehicle prices, which rose 10.2% in June, increased only 0.2% in July. Core CPI excludes food and energy prices, which rose 0.7% and 1.5% respectively. Those two categories propelled overall …

 A strong U.S. employment report was the top market event last week. Payrolls surged 943,000, and the prior two months were revised higher by 119,000 (Figure 1). Restaurants and bars continue to rehire workers as activity expands. The leisure and hospitality segment, which includes eating e …

 Supply chain issues continued to constrain economic growth and housing. U.S. GDP grew 6.5% in the second quarter, falling 2.0% short of expectations. Strong consumer demand created a surge in purchases. Production didn’t match demand, and the corresponding drop in inventories robbed more t …

The more contagious Delta variant has contributed to a 172% increase in U.S. COVID-19 cases over the last two weeks. The spike is raising concerns some social distancing measures may be reenacted. Initial jobless claims are increasing. Last week claims jumped above 400,000 after staying bel …

Two big economic releases in the U.S. and a series of economic data in China highlighted a challenging week for U.S. stocks. Inflation surged 0.9% and has now increased 5.4% over the last year (Figure 1). The U.S. Consumer Price Index increased more than expected, led by large spikes in use …