Thursday's Scoop: Leaping☀️

Hey friend - Happy Leap Day! Do something unusual with your extra day.

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

1. Layoffs increased last week.

2. High prices have slowed consumer spending.

3. Congress will officially procrastinate on a budget deal again.

Unemployment Rate: 3.7%
^{Still near the lowest rate in 50+ years}

Layoffs crept higher last week. The Labor Department reported initial jobless claims increased to 215,000 - still normal, but almost concerning. The number of people receiving unemployment benefits for consecutive weeks increased as well. The job market has been excellent by most measures, with near-record unemployment, but recent figures have indicated slower hiring and more layoffs.

Congress agreed to a short-term budget deal ahead of a partial government shutdown on March 1, but negotiations are far from over. A Continuing Resolution bill will buy lawmakers another week before a shutdown, hoping to pass budgets for half of the US government agencies by March 8. Deals are much closer to approval for that half of the government, which includes Agriculture, Transportation, Housing and Urban Development, Veterans Affairs, Energy, the Environmental Protection Agency, and the Departments of Commerce, Justice and Interior. The other half, including the Homeland Security Department, is still not near a resolution thanks to disagreements about border policies. They will give themselves until March 22 to finalize those deals.

Inflation Rate: +2.4% (YoY), +0.3% (MoM)
^{Policymakers aim for 2% YoY inflation. (PCE)}

Consumer spending keeps slowing as living costs rise. The Commerce Department reported personal consumption expenditures increased by only 0.2% in January, far slower than the 0.7% in December or 0.4% in November. When considering inflation, spending declined by 0.1% last month.

Higher prices on groceries and services have strained budgets. Policymakers’ preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE), rose 0.3% in January, or 0.4% when excluding volatile food and energy costs. The one-year change in the cost of living was only 2.4% over the past year, much closer to the normal levels policymakers have been trying to reach.

The Market: ⬆️ +0.5%
S&P 500: 5,096.27
1Mo: +4% | 1Yr: +28% | 5Yr: +86%

The market closed out the month on an optimistic note after the latest January inflation report calmed fears that high inflation was making a comeback. Enthusiasm is high in crypto as Bitcoin nears an all-time high.