Thursday's Scoop: Stumble 🌤️

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

1. Layoffs are picking up.

2. Geopolitical conflicts are pushing oil prices higher.

3. Investors are getting nervous.

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

Layoffs have started creeping higher. The Labor Department reported that initial jobless claims increased last week to 221,000—still normal but almost concerning. The number of people receiving unemployment benefits for consecutive weeks fell, indicating that people are still finding jobs reasonably quickly, just not as quickly as last year.

More layoffs could be coming, though. Coaching firm Challenger, Gray & Christmas said planned layoffs jumped 7% in March. The most significant cuts came from government positions, followed by the technology sector. We’ve seen plenty of layoff headlines over the past year, but they haven’t translated into a significant increase in unemployment yet for the economy. Unemployment is still near record lows. Job openings are still above pre-pandemic levels, so people may be finding jobs relatively quickly. Many layoffs have also been concentrated in high-paying corporate jobs that often come with severance, delaying or replacing unemployment claims altogether.

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

Escalating geopolitical tensions around the world have pushed oil prices to the highest level in months. There are serious concerns about a potential escalation of war in the Middle East. Iran, the seventh-largest oil producer in the world, vowed retaliation against Israel after an Israeli attack on Iran’s embassy in Syria killed two Iranian generals. The US also increased sanctions on Iran this week following continued attacks on ships near the Red Sea. On top of that, Ukraine’s recent strikes against Russia may have disrupted as much as 15% of the refinery capacity for the world’s second-largest oil producer. The major oil-producing nations are already artificially constraining oil supply to hold prices higher, so the additional conflicts only add to supply concerns.

The Market: ⬇️ -1.2%
S&P 500: 5,147.21
1Mo: +1% | 1Yr: +26% | 5Yr: +78%

The market sank lower on Thursday despite no significant shift in the broader narrative. Investors are getting a little nervous that the market has rallied a little too far ahead of the underlying health of the economy. The next two weeks will likely determine the path forward as we get more information on the job market, inflation, and corporate profits.