Tuesday's Scoop: Floating🌤️

Hey friend - welcome back to your daily scoops on the economy and companies impacting your life.

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

1. Fewer renters than ever see homeownership as a possibility.

2. The government is running out of money to support retirees.

3. Supply chains are running more smoothly than usual.

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

Global supply chains are running smoothly. The attacks on ships in the Red Sea and the Baltimore bridge collapse don’t seem to have created widespread disruption. The NY Federal Reserve’s Global Supply Chain Pressure Index fell to -0.85 standard deviations from its historical average in April, indicating fewer interruptions than usual. This should continue to help businesses decrease their operating costs and, hopefully, lower prices.

The government is running out of money to support retirees. The Social Security Administration, funded by a 12.5% tax split between you and your employer, provides essential income to 70 million retirees, disabled individuals, and survivors. While tax revenue has historically exceeded the required annual benefits payments and accrued in a trust, America’s aging population has created a yearly shortfall. This week, the Social Security Administration revealed new projections that the extra funds will run out by 2035. After that, annual tax revenue will only cover 83% of the necessary benefits, cutting retirees’ income by 17%. Congress must act soon to reduce benefits or increase taxes to prevent the shortfall. Social Security payments account for more than half of household income for 2-in-5 retirees. Twenty percent of beneficiaries depend on it for their entire income.

30yr Mortgage Rate: 7.3%
^{That’s up from 6.6% a year ago. (MBA)}
Median Home Price: $393,500
^{That’s up from $375K a year ago. (NAR)}

Americans are more pessimistic than ever about their ability to buy a home. The NY Federal Reserve revealed that 40% of all renters, and half of those under age 50, believe they will never be able to purchase a home amidst low income growth, high mortgage costs, and ever-increasing home prices. The perceived difficulty of getting a mortgage hit a record high going back ten years. It’s not just renters. Homeowners don’t expect to buy a new home anytime soon. The likelihood of moving within three years fell to record lows as well.

The Market: ⬆️ +0.1%
S&P 500: 5,187.70
1Mo: -1% | 1Yr: +25% | 5Yr: +80%

The market drifted higher again on Tuesday as investors continued to hope that a weakening economy might encourage policymakers to reduce borrowing costs sooner. Corporate financial updates haven't been inspiring.