Strong Jobs & Falling Inflation
What’s the catch?
Join me in our ‘Weekly Market Update’ to decipher what to expect in the coming weeks & months.
Happy Friday! Brian Manning here with the weekly update. Let’s get right to it.
I’m going to start by actually going back to last week. Last Friday, we got the BLS report. BLS stands for the Bureau of Labor Statistics. This report included employment numbers for December. There was an expectation in December that we would have 160,000 jobs created. However, when we got the report last Friday, it ended up being 256,000 jobs created in December. Unfortunately, the markets didn’t love this. If you look at what happened in the markets last week, there was a big sell-off that markets didn’t love. Why? The Federal Reserve, and we’ve talked about this in the past, has two mandates. Number one is price stability. That’s controlling inflation. Number two is employment stability in the US economy. If inflation is moving slowly and we’re all watching unemployment trends—wondering if it might rise or if the job market is softening—a blockbuster report like this could give the Federal Reserve a reason not to reduce interest rates. They might see it as evidence that inflation is somewhat under control or not increasing as quickly as it could be, while employment remains strong, leading them to hold off on taking action. This is kind of contrary to what you would think. Normally you would think that a strong employment report means that employment is healthy, people are excited, and people are high-fiving each other, but this was quite the opposite. So, the strong employment report didn’t go that well.
Then Monday markets were a little subdued because they started to think, wow, was that employment report accurate? This is because when we look at prior employment reports they are often revised lower.
Tuesday of this week was a quiet news day, not a lot to talk about there.
And then Wednesday of this week was the big news of the week. We got CPI which stands for the consumer price index. This is a gauge of inflation. There are two gauges of inflation that we get every single month. One is CPI, the other is PCE. PCE is a separate report. The excitement was that the core rate of CPI would go up on three-tenths of a percent increase on a month-over-month basis. Instead of going up three-tenths of a percent, it only went up two-tenths of a percent. So, the core CPI rate moved from 3.3 down to 3.2. There was a lot of excitement in the marketplace for that because most people did not think inflation would move lower this month as we saw. The markets reacted favorably, with bonds, stocks, etc. It is a relief to see a continuation in the taming of inflation.
Thursday, another good report- retail sales. This is also for December. You never know how retail sales are going to go in December because of the holidays. The expectation was that sales would be up six-tenths of a percent, but retail sales were only up four-tenths of a percent. So, when we saw inflation come down this week and a report that wasn’t expected, that was great to see, and you see less consumer spending. So you saw retail sales lower this week which markets love. We also saw some improvement in interest rates.
If you wanna get pre-approved for a mortgage, give me a call. I’m available seven days a week, 8:00 AM to 8:00 PM. Reach out to me anytime. Realtors, right now we’re hosting “Winning the Listing Presentation”. We’re having great success with this class. We have classes coming up in Denver, Fort Collins, and Colorado Springs, then we circle back around and do another one in Boulder. If you have not already, RSVP. We did our Boulder class this week and it was sold out. We had people lining up to get in. Unfortunately, we just didn’t have any more space. So if you want to come to our class, make sure your RSVP because we certainly want to see you there.
Hope you have a great day. We’ll talk with you soon.
________________________________________________________________________________
Questions? Concerns? Ready to get started with my strategic buyer consultation?
Call me any day of the week, Monday- Sunday to get connected & learn about your options.
It’s never too soon to understand what you can afford!
303-500-3839
Brian@BrianManningTeam.com
LICENSED TO SERVE YOU IN:
- Colorado
- California
- Arizona
- Illinois
- Florida
- Wyoming
Oh yeah, want to get my weekly Friday Market Update straight in your inbox?? Join our mailing list!
Email me directly at Brian@BrianManningTeam.com