10 Things You Need To Know: May 10, 2022
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Wed), PPI (Thu), and consumer sentiment (Fri).
Haver
May 4, 2022
At the meeting of the Federal Open Market Committee (FOMC), the Fed announced that it will raise the target for the Federal funds rate to a range of 0.75% – 1.00% from 0.25% – 0.50%. It placed the rate at the highest level since March 2020. The move was as expected in the Action Economics Forecast Survey.
Haver
May 6, 2022
Nonfarm payroll employment increased 428,000 (4.6% y/y) during April, the same as in March which was revised from 431,000. A 390,000 April gain had been expected in the Action Economics Forecast Survey. The 714,000 February increase was revised from 750,000. Wage growth continues to trek higher. Average hourly earnings rose 0.3% in April versus an expected 0.4% rise. The 5.5% y/y gain in April is up significantly from the 4.2% gain registered for all of 2021.
Haver
May 3, 2022
The Bureau of Labor Statistics reported that on the last business day of March, the total number of job openings was at a series high of 11.549 million, 1.8% m/m (+36.2% y/y) from February’s 11.344 million. With this small change in the number of job openings, the job openings rate, calculated as job openings as a percent of the sum of total employment and openings, was 7.1% in March, up from 7.0% in February.
Haver
May 4, 2022
The U.S. ISM Services Index fell to 57.1 in April from 58.3 in March, according to the Institute for Supply Management. The figure was below the peak of 68.4 in November of last year. The Action Economics Forecast Survey expected a reading of 58.5.
Financial Times, Reuters
May 5, 2022
The Bank of England raised its benchmark interest rate 0.25% to 1% and cautioned that the UK economy could enter a recession by the end of the year. The central bank said soaring energy prices will send inflation above 10% and slash household incomes.
CNBC
May 1, 2022
Policies adopted by China to solve problems in its domestic economy are driving up inflation elsewhere in the world, according to a report from the Peterson Institute for International Economics. The country’s restrictions on fertilizer, pork and steel have increased costs elsewhere, the report said.
Barron’s
May 9, 2022
So far this earnings season, S&P 500 profit margins have contracted by almost 4% year over year, according to Credit Suisse. Stocks with relatively low valuations and high cash-generating businesses could be the best place for investors to weather the known unknowns.
Barron’s
May 9, 2022
Some forecasters look for gold to reach $3,000 an ounce in two years. However, even that lofty price wouldn’t top gold’s January 1980 peak of $875, in inflation-adjusted terms. To do that, the metal would have to rise to a little over $3,200 an ounce, according to the CPI inflation calculator.
Bloomberg
May 6, 2022
Federal Reserve officials stressed their determination to curb inflation, with one saying nothing was off the table, including raising its key interest rate by 75 basis points. “I never rule anything out. So, I think anything would be on the table,” Richmond Fed President Thomas Barkin said. “I’ll just say our pace is pretty accelerated right now, and so if you go to the pace that the chairman suggested, that’s a pretty accelerated pace.”