Thursday's Scoop: Stumble 🌤️

Hey friend - almost Friday! We’ll keep sharing the scoops to help you see the economy and the companies impacting it more clearly.

Insiders, look out for the Weekly Scoop tomorrow.

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

1. Layoffs are still low.

2. Wages aren’t keeping up with the rising cost of living.

3. Prices are rising much more for consumers than for businesses.

Unemployment Rate: 3.8%
^{Still near the lowest rate in 50+ years}

Layoffs are still pretty low, even after creeping up earlier in the month. The Labor Department reported that initial jobless claims fell last week to 211,000, slightly above pre-pandemic levels. The number of people receiving unemployment benefits for consecutive weeks rose again, mostly trending higher, but unemployment is still near record lows.

Wages aren’t keeping up with the cost of living. The Labor Department reported average hourly earnings rose only 0.3% in March, trailing the 0.4% increase in the cost of living. The decline in real wages follows a steep decline in February. When adjusting for inflation, average weekly earnings have increased only 0.6% over the past twelve months after declining for over two years.

Inflation Rate: +3.5% (YoY), +0.4% (MoM)
^{Policymakers aim for 2% YoY inflation. (CPI)}

Prices are rising much faster for consumers than for businesses. The Labor Department’s producer price index (PPI) rose only 0.2% in March, half of the increase in the consumer price index (CPI). Wholesale prices have increased only 2.1% over the past twelve months, compared to 3.5% for the stuff consumers pay for. Businesses’ supply costs have declined for five out of the past six months. Eggs, steel, jet fuel, and fruit all got cheaper in March. Falling goods prices were offset by rising services costs, particularly financial services fees and airline passenger services.

The Market: ⬆️ +0.7%
S&P 500: 5,199.06
1Mo: +1% | 1Yr: +27% | 5Yr: +79%

The market rebounded a bit on Thursday after the Producer Price Index calmed investors' nerves about inflation. Businesses aren't dealing with the same cost inflation they're pushing onto consumers. If wholesale goods and service costs aren't escalating, policymakers might be more likely to ease up their restrictive measures.