Article source: ConstructConnect

Let’s jump right into a discussion of some of the more interesting numbers to have appeared in recent public and private sector data releases. Exorbitant prices charged for nearly everything is seemingly top of mind for everyone, so that’s where we’ll begin. Is there relief in sight?

(1) Inflation in both the U.S. and Canada moderated a little in July. The U.S. Consumer Price Index (CPI-U, where U stands for Urban consumers) eased back to +8.5% year over year from +9.1% in June. On a month-to-month basis, CPI-U stayed the same. In Canada, the CPI slowed to +7.6% y/y in July from +8.1% in June. Canada’s month-to-month change was +0.1%.

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Article source: ConstructConnect

Changes are happening quickly with respect to costs and prices in the economy.

This article, in tables and graphs, sets out the latest Producer Price Index (PPI) results published by the Bureau of Labor Statistics (BLS).

The figures appearing below are for June and readers should know that for some materials, especially in the energy sphere, there have been significant downward shifts over the past month and a bit. For example, the per gallon price of gasoline has recently come off its high of $5.00 and is now down around $4.00.

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Article source: ConstructConnect

It’ll be hard for anyone to find much fault with July’s Employment Situation report from the Bureau of Labor Statistics (BLS). The total number of jobs gained during the month was +528,000, which beat the previous six-month average of +461,000. Interestingly, it was just about a match for January-to-June 2021’s average of +533,000.

My concern is that the news may be too good. Will it instruct the Fed that the economy remains too hot, and is begging to be restrained by aggressive interest rate hikes beyond what are already expected? Will the Fed figure it needs to go past ‘neutrality’ (i.e., a federal funds rate of 3.50% as a ceiling) in its assault on inflation?

The most striking development is that the total U.S. jobs count has finally returned to a level approximately even with peak employment immediately prior to the onset of the pandemic.

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It seems everyone is talking about recession. Are we already in one? Should we pencil one in for 2023? Is there any possibility one can be avoided entirely? Stock market investors in North America, Europe and Japan no longer seem terribly worried.

In July, eight key indices (as set out in Table 2) cast aside their cloaks of gloom and went looking for the sun again. NASDAQ performed best (+12.3% month to month), followed by the Russell 2000 (+10.4% m/m), S&P 500 (+9.1%), STOXX Europe (+7.9%), the DJI (+6.7%), the German DAX (+5.5%), Tokyo’s Nikkei (+5.3%) and London’s FTSE (+2.5%).

More than half of Q2 earnings have now been reported and results versus estimates have been better than expected. It must be acknowledged, though, that this is partly the result of downward revisions to target estimates due to a slowing economy. U.S. ‘real’ (i.e., after inflation) GDP change in Q1 of this year was -1.6% annualized and in Q2, -0.9%.

There are two kinds of confidence that have a great deal of bearing on where economies will meander next. The first of these is consumer confidence.

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