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Weekly Economic & Financial Commentary: Economic Storm Clouds or Just a Brisk Inflationary Headwind?

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Summary

United States: Economic Storm Clouds or Just a Brisk Inflationary Headwind?

  • Nonfarm payroll growth exceeded expectations in May, with employers adding 390,000 jobs. The unemployment rate was unchanged at 3.6%, but labor force growth edged higher and wages rose only modestly. Most of this week’s other reports also came in above expectations, with the ISM manufacturing index rising 0.7 points to 56.1 and factory orders posting solid, broad-based gains.
  • Next week: Trade Balance (Tues), CPI (Fri), U. of Mich. Sentiment (Fri)

International: Hawkish Hike from the Bank of Canada, Mixed Data in the Emerging Markets

  • The Bank of Canada delivered a 50 bps policy rate hike to 1.50%, and the accompanying statement was more hawkish than market participants expected. In emerging markets, data from China this week suggest the worst may be behind, as May PMI data revealed a modest uptick in sentiment. While China’s economy is showing tentative signs of stabilization, Brazil is showing signs that activity is decelerating.
  • Next week: European Central Bank (Thurs), Mexico Inflation (Thurs), Brazil Inflation (Thurs)

Credit Market Insights: Federal Student Loans Brought to the Forefront Again

  • On Wednesday, the Federal Department of Education announced that it will discharge $5.8B in federal student loans. These targeted actions do not broadly effect American balance sheets or the macroeconomy—$5.8B in federal student loans is a small fraction of the $1.6T in total student loan debt.

Topic of the Week: The Growing Economic Influence of the LGBTQ+ Community

  • Organized protests like the “Stonewall Uprising” have brought attention to the countless injustices that have been, and continue to be, inflicted on individuals identifying as LGBTQ+. The events that transpired 53 years ago were a pivotal moment in the long fight for equal rights. To commemorate Pride Month in 2022, we explore the growing economic influence of the LGBTQ+ community.

Full report here.

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