• February’s job gains exceeded expectations, yet the underlying trends in the employment report indicate a softening labor market.
  • Three sectors continue to propel job gains: healthcare, leisure & hospitality, and government (primarily public school teachers).
  • The NY Fed’s consumer survey showed inflation expectations moving up last month, as gasoline prices climbed.
  • Households expect slower inflation in food, medical care, and rent.
  • But rent inflation is picking up again.

  • Companies report that labor shortages are easing.

  • Full-time employment is now down on a year-over-year basis. The grey is recession periods.

  • Inflation strengthened in February, with the core CPI topping expectations again.
  • Following eight months of declines, the core goods CPI registered an increase, boosted by a gain in used vehicle prices.
  • The core services inflation continues to run hot, as rent inflation accelerated. The Owner’s Equivalent Rent CPI (second panel) moderated from January’s spike but remains elevated.

  • The probability of a Fed rate cut in May tumbled in response to the hot CPI print.
  • Small businesses continue to report soft earnings.

  • Last month’s producer prices topped expectations, reflecting persistent inflationary pressures.

Source: CNBC   Read full article

  • Even with the rise in WARN notices, initial jobless claims remained close to multi-year lows last week, suggesting that the labor market is still tight.
  • Markets reacted sharply to the hot PPI report and low jobless claims, leading to further reductions in projections for Fed rate cuts this year.
  • However, market participants are concerned that the dot plot will shift higher at next week’s FOMC meeting.

Source: MarketWatch   Read full article

Market Data

  • Smartphone shipments:

  • This chart shows the historical real total return performance of a US 60% equity/40% bond portfolio with shaded “lost decades.”

Source: Goldman Sachs

  • Here is a look at recovery times after market declines.

Source: @wealth   Read full article

  • Here is a look at US banks’ commercial real estate exposure.

  • Which sectors and equity factors contributed to market gains on the day the core CPI exceeded expectations?

  • Regional banks continue to widen their underperformance, …

  • … as earnings expectations deteriorate.

  • Here is a look at the tech sector’s share of the overall market cap.

Great Quotes

“When I was a kid my parents moved a lot, but I always found them.” Rodney Dangerfield

Picture of the Week

Bryce Canyon National Park

All content is the opinion of Brian Decker