Thursday's Scoop: Shaken ⛅

Hey friend - happy 🥧 day to my fellow nerds out there!

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

1. Layoff rates are still low.

2. Inflation is picking up.

3. Consumer spending is slowing.

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

Layoffs are still low. The Labor Department reported initial jobless claims decreased last week to 209,000. The number of people receiving unemployment benefits for consecutive weeks increased again, indicating finding work may be more challenging. Unemployment is still near record lows, but hiring has slowed significantly. Worker wages aren’t rising as quickly as they were last year.

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

Businesses felt an unexpected jump in the cost of materials last month, raising alarms about a potential inflation resurgence. The Labor Department reported a surprising surge in the producer price index (PPI) in February, rising 0.6% after an unexpected 0.3% increase in January. Prices are up 1.6% over the past year. Gas, food, and other material goods grew more expensive for business owners. Goods prices haven’t been rising very quickly over the past year as consumers and businesses shifted their spending towards services, so spiking prices for goods and products raises concerns about whether policymakers truly have inflation under control.

Consumers aren’t spending as much amidst the rising cost of living. The Commerce Department reported US retail sales rose only 0.6% in February, well below what economists expected. Sales fell 1.1% in January, and December numbers were revised lower. Higher prices at the pump led to more sales at gas stations, but online sales dipped. Consumers power two-thirds of the economy, so economic growth depends on Americans spending more and more each month. Overall retail spending is only up 1.5% over the past year, and when accounting for the inflated price tags, spending is actually down.

The Market: ⬇️ -0.3%
S&P 500: 5,150.48
1Mo: +2% | 1Yr: +32% | 5Yr: +83%

The market sank lower on Thursday after new economic data painted a picture of a slowing economy with a rising cost of living. Investors don't expect policymakers to start reducing borrowing costs anytime soon.