The labor market data for the month of August was disappointing in terms of the number of new jobs and the lack of progress in labor force participation.  The more important data point was the expiration of the enhanced unemployment benefits.  Going forward, future payroll reports will include survey periods post the expiration of benefits. ...Read More

At the end of June, we wrote an update discussing the changes certain states were making regarding unemployment benefits.  Several states were ending the enhanced payments from the federal government and the expanded coverage that had allowed people outside of the normal unemployment insurance program to file claims. At the time, we noted that it...Read More

Last week, we noted that market signals were going to be a helpful guide for determining investors’ expectations for the future state of economic growth and inflation.  Volatility increased last week, especially in commodities and currencies.  However, most market signals still suggest that the economy is not headed toward a recession or deflation. In the...Read More

Due to the large moves up and down in economic data in 2020 caused by the shutdown of activity, it is challenging to determine the expected path of the rate of change in economic activity because the comparison set is so unusual.  The rate of change in economic growth and inflation rates has important implications...Read More

In our last update we noted that economic growth was slowing as the recovery matures and the weakest comparisons from 2020 have passed, but recession risk remains remote.  The global PMI data last week provided some confirmation of this view. The global Markit Composite PMI (services and manufacturing) declined one point to 55.7 as both...Read More

Last week, we noted that Treasury yields have been declining while other market signals were not suggesting that growth and inflation were declining.  Last month, we noted that on a longer-term basis cyclicals, higher beta, and lower quality securities were outperforming even though they had been recently lagging.  We believe it would be helpful to...Read More

The U.S. 10-year Treasury yield peaked on March 31st at 1.75% and has been steadily decreasing, with the pace accelerating in June.  The yield briefly dropped below an important trend level of 1.30%, then ended the week at 1.36%.     Source: Koyfin. This was being reported as a potential sign that the outlook for economic...Read More

One of the major debates in the economic arena is whether current inflation levels are sustainable.  We thought it would be helpful to take a look at the component weights in the Consumer Price Index (CPI) calculation and the trends of the major inputs. The largest single category of the CPI calculation is shelter and...Read More

Several states are removing emergency era unemployment benefits and the impact of this should start showing up in the weekly continuing unemployment claims (green box below) in the next few weeks, and through the rest of the summer, until the program ends in September.  Source: Department of Labor. The intention of these changes is to...Read More

The ability to source materials and human capital to meet existing and future demand are risks to economic activity for the remainder of 2021.  Several of the economic data points from the prior week highlighted this risk but also reinforced that there is ongoing demand and positive sentiment for the future if these supply issues...Read More