Monday's Scoop: Stewing🌤️

Hey friend - hope you got a little foolish this weekend.

📣📣 Quick shout-out for my favorite comment of last week on the DNUT scoop:
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“Krispy Kreme really knows what I want and how I like it. It's a power move from the CEO, he just put everyone on notice and let us know he's here and it's still him.”
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cnagal47, you’re getting 3 months of free upgrade to Insiders. Thanks for scoopin!

Insiders, catch up with our Weekly Scoop and don’t miss last week’s discussion. If you’re not an Insider, refer, open, vote, or upgrade to unlock your status!

Here’s what you need to know today to inform your work, spending, and investments…

1. The cost of living keeps climbing.

2. US manufacturing is recovering.

3. Construction spending is down.

Unemployment Rate: 3.9%
^{Still near the lowest rate in 50+ years}

US manufacturing is starting to make a comeback. The Institute for Supply Management (ISM) reported that economic activity in the manufacturing sector expanded last month for the first time in 1.5 years. Americans haven’t been buying as much stuff, leading to fewer orders, low production, and the longest stretch of contracting business activity since the 2007-2009 recession. The ISM index surged in March to its highest rating since September 2022. New orders and production rebounded, but prices also picked up, raising concerns about more inflation.

Construction is slowing across the country. The Commerce Department said US construction spending unexpectedly fell 0.3% in February after sliding 0.2% in January despite surging activity in the housing market. Rising new home construction was offset by less spending on commercial buildings, new factories, healthcare facilities, and recreational projects.

Inflation Rate: +3.2% (YoY), +0.4% (MoM)
^{Policymakers aim for 2% YoY inflation (CPI)}

Rising prices don’t seem to be keeping people from spending. The Commerce Department reported Friday that the cost of living keeps rising faster than policymakers would like to see. The Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, rose 0.3% in February. Overall, most things we spend money on are 2.5% more expensive than they were a year ago. Spending, though, hasn’t slowed down. Even adjusted for inflation, consumers spent 0.4% more in February, compared to a -0.2% decline in January. Investors worry persistent inflation may force policymakers to keep borrowing costs high for longer.

The Market: ⬇️ -0.2%
S&P 500: 5,243.77
1Mo: +2% | 1Yr: +27% | 5Yr: +81%

The market wobbled lower to start the month as investors worried about inflation. US manufacturing is rebounding, consumers keep spending, and the cost of living keeps rising, raising concerns that policymakers will keep borrowing costs higher for longer.