Tuesday's Scoop: Shaken 🌥️

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. Wages are rising faster than the cost of living.

2. Pessimism about the economy is growing.

3. Workers are more nervous than usual to change jobs.

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

Wages are finally catching up to the rising cost of living. The Labor Department reported total compensation for American workers rose 1.2% in the first three months of the year, with wages and benefits growing faster than in the fourth quarter. Those earnings gains slightly outpace inflation for the start of the year. Over the past twelve months, total compensation has increased by 4.2%, including a 4.3% wage gain and a 3.7% increase in benefits. Adjusting for inflation, total compensation is up 0.8% in the past year after declining the two years prior.

Americans turned more pessimistic about the economy this month. The Conference Board's Consumer Confidence Index fell again in April to the lowest level in over 18 months. Finding jobs is more challenging, business conditions are worsening, and it’s getting harder to manage the rising cost of living. Consumers power two-thirds of the economy, so economists monitor sentiment closely.

A tough job market and general uncertainty have made workers more nervous about changing jobs. The Philadelphia Federal Reserve reported that the number of people who changed jobs last month fell to historic lows, as fewer than one in fifty workers successfully swapped employers. Job openings have shrank from over 12 million in March 2022 to less than 9 million last month. There are still more openings than there were before the pandemic, but they’re concentrated in specific industries. The market for white-collar jobs is particularly competitive right now.

The Market: ⬇️ -1.6%
S&P 500: 5,035.69
1Mo: -4% | 1Yr: +21% | 5Yr: +71%

The market tumbled lower on Tuesday as investors worried that rising wages would create more inflation than rising corporate profits. Consumer confidence is waning, and retail companies like McDonald's have started warning that customers are pushing back on price increases.