Weekly economic & financial commentary
|Summary
United States: Growing Pains: Extended Lead Times, Supply Chain Constraints, Difficulty Finding Labor
- The unmistakable message delivered in this week's data is that the U.S. economy could be growing even faster were it not for limited access to essential raw materials and labor.
- The April jobs report was a massive disappointment. Employers added just 266,000 workers, not even in the same ZIP code as the one-million job surge that was expected. Finding and retaining workers is a massive problem. Another is that manufacturers forced to idle plants for lack of materials have to furlough workers.
- The reopening of the service sector was a bright spot as the leisure & hospitality sector added 331,000 new jobs.
- Next week: CPI (Wednesday), Retail Sales (Friday), Industrial Production (Friday)
International: Bank of England Less Easy
- The Bank of England (BoE) scaled back the pace of asset purchases at its meeting this week and also signaled that the economy may be recovering quicker than expected. In our view, it is likely BoE asset purchases get further tapered in the near future.
- Next week: U.K. GDP (Wednesday), India CPI (Wednesday), Central Bank of Mexico (Thursday)
Credit Market Insights: Loan Demand Remains Tepid in Q1
- This week, the Federal Reserve released the Q1 results from its Senior Loan Officer Opinion Survey. Broadly speaking, the results showed that demand for bank loans remains relatively tepid across most lending categories.
Topic of the Week: What's Driving the Sharp Rise in Lumber Prices?
- The knock-on effects of the pandemic have constrained the lumber supply at a time when demand has soared. Lumber futures contracts for May are up around 60% since a month ago and 374% over the year.
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