Falling commodity prices reflect cooling economy. While pricing pressures remain above target 27 months into the Federal Reserve’s current monetary tightening cycle, meaningful relief is beginning to show. Annual growth in the commodities less food and energy index — which captures pricing changes for non-necessity items such as recreation, vehicles and apparel — has been in negative territory for six consecutive months and reached a near 20-year-low at -1.8 percent in June. Elevated costs for essentials… Read More

Job creation supported by business-cycle-agnostic sectors. The creation of 206,000 jobs in June brings total net hiring for the second quarter to 532,000, the lowest three-month total for employment growth since January of 2021. Much of the recent hiring slowdown has come from industries tied to the business cycle, including net job losses recorded during June in both the professional and business services sector as well as retail trade. Year-to-date job creation has been stronger… Read More

Labor market moving closer to equilibrium even amid strong hiring. Total employment increased by 272,000 in May, coming in above the average monthly gain year-to-date. Despite this uptick in job creation, there are several signs that overall labor demand is cooling and moving closer in line with labor supply. Nearly half of last month’s hiring was concentrated in just two main employment sectors, which includes roles in government. It is likely that public sector staffing needs… Read More

Key CPI measures resume descent. Annual growth in the headline and core consumer price indices — the latter of which omits food and energy — lowered to 3.4 and 3.6 percent in April, respectively. While bumpy inflation over the last few months curbed Wall Street  expectations for near-term overnight lending rate cuts by the Federal Reserve, April’s cooler readings suggest the Fed is still making meaningful progress in bringing pricing pressures down. Further stripping out housing… Read More

Key GDP growth contributors post positive results. Real gross domestic product increased at an annual rate of 1.6 percent during the first quarter of 2024. While this is a deceleration from the 3.4 percent rate from the final quarter of last year, the economy still grew in several areas. U.S. residents continued to spend robustly, with final sales to private domestic purchasers up 6.1 percent annualized, the best mark in a year. Residential and non-residential… Read More

Most store types report encouraging start to 2024. Consumers set a new benchmark for quarterly retail sales volume in the first three months of 2024 — roughly $1.55 trillion. Spending during the January-March span was up 3 percent when compared to the same period last year, despite slackening consumer confidence. This recent rise in spending occurred alongside consumers spreading their purchases across more types of retail, with seven of 10 major categories notching gains. While still… Read More

Energy cost spike bumps up inflation. Mounting costs for gasoline and electricity kept overall inflation elevated over the 12-month period ending in March. The headline CPI measure grew by 3.5 percent during the span, ticking up as the energy index moved into positive territory for the first time since February 2023. Geopolitical conflict, spring-season travel, and energy providers shifting operations amid warmer weather contributed to these higher costs. Fortunately, the seasonality of rising energy prices suggests… Read More

Early Signs Point to Improving Office Sector; Investment Trends Begin to Reflect Changes During the fourth quarter of last year, office net absorption exited the red for the first time in 15 months, pulling nationwide vacancy down 10 basis points. Over 21 million square feet on net was newly occupied between October and December, comparable to an average quarter in 2019. Nearly three-fourths of all major U.S. markets recorded positive net absorption. Key Features Include:… Read More

March logs the 39th straight month of job gains. Employment growth reached a 10-month high in March as 303,000 positions were added, while the unemployment rate adjusted down to 3.8 percent. Hiring was most prominent in health care, government, construction, and leisure and hospitality. Additions in health care and leisure and hospitality, in particular, should help ease staffing shortages in…

Consumers’ priorities reflected in annual gains. While the 2.2 percent year-over-year gain in total core retail sales reported in February failed to match the 3.8 percent rise in core CPI, three key categories bucked this trend. Rising sales amid moderating or falling prices point to what purchases households are prioritizing amid tightening budgets. Factoring in inflation, apparel sales rose 1.3 percent year-over-year in real terms last month, while electronics and appliance sales grew by…