Weekly economic update for June 21, 2022

Weekly economic update for June 21, 2022

Highlights of key economic statistics from last week compiled by Putnam Investments.


economy

  • The Producer Price Index for final demand increased 0.8% in May, the Bureau of Labor Statistics found.
  • Retail sales fell 0.3% in May compared with April, the Census Bureau stated.
  • Housing starts dropped 14.4% in May compared with April, the Census Bureau reported.

Employment

  • Initial jobless claims fell by 3,000 to 229,000 in the week ended June 11, 2022, according to the Department of Labor.

Profits

  • As of June 9, 2022, of the 499 S&P 500 Index companies reporting first-quarter earnings, 384 beat analysts’ estimates, according to S&P Dow Jones Indices.

Emotion

  • The NFIB Small Business Optimism Index fell in May.

Europe

  • Eurostat reported euro area annual inflation rose to 8.1% in May from 7.4% in April.
  • Eurostat noted euro area industrial production rose 0.4% in April compared with March.
  • Germany’s Federal Statistical Office stated the CPI increased to 7.9% year over year in May, reaching a record high.

Rates

  • The yield on the 10-year Treasury note rose.
  • The Federal Reserve increased the target range for the federal funds rate by 75 basis points.
  • The Bank of England raised the bank rate by 25 basis points to 1.25%.

Risks

  • Rising energy prices, worsened by the Russia-Ukraine War, increase the risk of stagflation and recession, even as central banks seek monetary policy normalization.
  • Declining liquidity and deteriorating financial conditions, combined with high valuations, are contributing to a substantial uptick in risk asset volatility.
  • Global leverage is at worrisome levels and will eventually need to be paid for, at a time when most developed markets are facing a fiscal drag from the end of post-pandemic stimulus.

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All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.

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