Chief Economist Scott Brown discusses the latest market data.

Initial claims for unemployment benefits fell below one million for the first time since mid-March (20 weeks). However, unadjusted claims had already dipped below that level a week earlier. (The seasonal adjustment is multiplicative, with exaggerated adjusted figures in August and September, when claims are typically at their lows for the year.) Unadjusted claims totaled 831,000.

The Consumer Price Index rose 0.6% (+1.0% y/y), also up 0.6% excluding food and energy (+1.6% y/y). As with the Producer Price Index and import prices, the CPI reflected rebounds in prices that were depressed due to the pandemic (apparel, transportation services, gasoline) and a continued low underlying trend. Retail sales rose 1.2% in July (+2.7% y/y). While overall retail sales are now 1.7% higher than in February, the mix has changed (apparel, department stores and restaurants are still well below February levels, but sales of groceries, motor vehicles, sporting goods and home improvements are all higher). Industrial production rose 3.0% in July (-8.2% y/y), with manufacturing output up 3.4% (-7.5% y/y). The University of Michigan’s Consumer Sentiment Index was little changed in the mid-August assessment (72.8, vs. 72.5 in July). The report noted that “two significant changes since April have been that consumers have become more pessimistic about the five-year economic outlook and more optimistic about buying conditions.”

Next week, the economic data reports aren’t expected to be market-moving, although weekly jobless claims will remain a key focus. Claims should continue to trend lower (amplified by the seasonal adjustment). Residential construction activity should continue to improve. The Index of Leading Economic Indicators should post another gain, led by the longer factory workweek and the drop in jobless claims. FOMC minutes should reveal the debate about changes to the Fed’s monetary policy goals and strategies (such as an inflation trigger for the next Fed rate hike).

Indices

  Last Last Week YTD return %
DJIA 27896.72 27386.98 -2.25%
NASDAQ 11042.50 11108.07 23.07%
S&P 500 3373.43 3349.16 4.42%
MSCI EAFE 1912.76 1862.30 -6.10%
Russell 2000 1579.79 1544.62 -5.32%

Consumer Money Rates

  Last 1 year ago
Prime Rate 3.25 5.25
Fed Funds 0.00 2.11
30-year mortgage 3.08 3.60

Currencies

  Last 1 year ago
Dollars per British Pound 1.3067 1.206
Dollars per Euro 1.1814 1.114
Japanese Yen per Dollar 106.93 105.91
Canadian Dollars per Dollar 1.322 1.332
Mexican Peso per Dollar 22.167 19.676

Commodities

  Last 1 year ago
Crude Oil 42.24 55.23
Gold 1970.40 1527.80

Bond Rates

  Last 1 month ago
2-year treasury 0.16 0.14
10-year treasury 0.70 0.60
10-year municipal (TEY) 0.95 1.15