This Week's State Of The Economy - What Is Ahead? - 01 April 2022

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Apr 05, 2022

This Week's State Of The Economy - What Is Ahead? - 01 April 2022

Interesting factoid I’ve seen noted several places recently is that the Millennial generation (1981 – 1996) surpassed the Baby Boom as the largest generation in U.S. history.  That is relevant because after a delay caused by factors such as student debt, and possibly some other factors as well, more Millennials will reach the age of 32, the median age for first-time home buyers, over the next two years than ever before.  That seems like a strong indicator for continued strong home sales for the next two years at least, unless of course interest rates escalate to a level that forces them to remain renters.

 

The key factor that will drive interest rates is the Fed’s belated effort to rein-in inflation.  The Fed's difficult job got harder this week. Its preferred inflation gauge set another fresh 40-year record high while the ISM prices paid measure shot up 11.5 points to 87.1. Payrolls increased 431K in March with steep upward revisions that lifted last month's gain, but personal income is not quite keeping pace with price gains. Small wonder, the yield curve temporarily inverted, a sign the bond market is losing faith in a soft landing.




This Week's State Of The Economy - What Is Ahead? - 02 September 2022

More job seekers also lifted the participation rate to 62.4% and thus easing some tightness in the job market even as payrolls expanded.

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The Wells Fargo Economics team notes in the Commentary that new COVID cases in New Zealand disrupted the Reserve Bank of New Zealand\'s plan to tighten monetary policy this week.

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Supply chain bottlenecks continue to cause pain-in-the-necks. In spite of all the difficulties, the Economic whizzes in the WF Economics team have upgraded their forecast for full-year 2021 U.S.

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After last week\'s stronger-than-expected CPI, less surprising was the 75 point rate increase put forth by the Fed.

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Employers continued to add jobs at a steady clip in October, demonstrating the labor market remains tight and the FOMC will continue to tighten policy.

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Nonfarm employment rebounded in January, with employers adding 49,000 jobs following the prior month\'s 227,000-job drop.

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Various price metrics released this week showed some continued signs of inflation cooling, but gradually rather than rapidly.

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The release of the transcript of President Trump\'s phone conversation with Ukraine President Volodymyr Zelenskiy and the whistle blower complaint overshadowed most of this week\'s economic reports and took bond yields modestly lower.

This Week's State Of The Economy - What Is Ahead? - 27 January 2023

Real GDP expanded at a 2.9% annualized pace in Q4. While beating expectations, the underlying details were not as encouraging. Moreover, the weakening monthly indicator performances to end the year suggest the decelerating trend will continue in Q1.

This Week's State Of The Economy - What Is Ahead? - 07 October 2022

higher interest rates and inflation appear to be weighing on manufacturing and construction, yet service sector activity remains fairly resilient.


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