Crosstown Commercial / May 3, 2022
Pressures on Pricing – The most significant year-over-year jump in 40 years, the Personal Consumption Expenditures (PCE) index rose 4.5% since the same time last year. And according to the BEA, personal income increased 0.5% in February, and disposable personal income increased 0.4%. In response to raging inflation, the Federal Reserve has increased interest rates by 0.25% and we can anticipate several more spikes by the end of the calendar year.
Solidifying Job Market – After the COVID-19 pandemic brought economic expansion to a halt, and surging increases to the unemployment rate, payrolls finally seem to be on the rise. Unemployment rates are now at a two-year low of 3.6%. We anticipate the Fed to dampen inflation as we start to see tighter labor conditions and higher wages.
Oil Relief –
Price pressures: The Personal Consumption Expenditures (PCE) index rose 5.4% from a year ago, its largest jump in 40 years. Including gasoline and food, the PCE jumped 6.4%. In response to rampant inflation, the Federal Reserve recently raised baseline interest rates by 0.25% and expects to make six more hikes this year. – CNBC
Oil relief: Oil prices plummeted last week after the White House announced a six-month infusion of 1 million barrels of oil per day from the Strategic Petroleum Reserve. With global instability spiking prices, the release is to “serve as bridge until the end of the year when domestic production ramps up,” the administration said in a statement. – CNBC
Solid jobs: U.S. nonfarm payrolls increased by 431,000 jobs in March and the counts for January and February totals were revised upward by 95,000, sending unemployment to a twoyear low of 3.6%. With tighter labor conditions and higher wages, the Fed seemingly has every reason to raise rates to dampen inflationary flames. – Reuters