Week of Aug 12, 2022 Weekly Recap & The Week Ahead
Monday, August 15th, 2022“The biggest risk is not taking a risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zuckerberg
1. U.S. Productivity Falls for Second Straight Quarter — U.S. nonfarm labor productivity—a measure of goods and services produced in the U.S. per hour worked—fell at a seasonally adjusted annual rate of 4.6% in the second quarter from the prior quarter, the Labor Department reported. Economists surveyed by The Wall Street Journal had estimated a drop of 5%. Quarterly productivity figures are volatile, but the weak second-quarter number follows a 7.4% pullback in the first quarter, the sharpest drop in 74 years. Together with rising labor costs, the report points to the challenges for the Federal Reserve’s efforts to tamp down inflation that is running at a four-decade high.
2. House Passes Democrats’ Climate, Healthcare and Tax Package — the House passed a climate and healthcare bill Friday that will soon head to President Biden’s desk, the culmination of a yearlong push Democrats hope will motivate their voters in the midterm elections but that Republicans cast as harmful government overreach.
The party-line 220-207 vote comes less than a week after the Senate passed the measure. It imposes new taxes on large, profitable corporations, spends $87 billion over a decade on new workers and technology at the Internal Revenue Service, caps insulin costs for Medicare recipients, puts Medicare on course to negotiate drug prices and funds hundreds of billions in tax subsidies intended to combat climate change.
3. Pace of U.S. Inflation Eased in July as Energy Costs Dropped — the Labor Department reported the consumer-price index, a measure of what consumers pay for goods and services, rose 8.5% in July from the same month a year ago, down from 9.1% in June. June marked the fastest pace of inflation since November 1981. On a monthly basis, the CPI was flat in July after rising for 25 consecutive months, the result of falling energy prices such as gasoline. Core CPI, which excludes often volatile energy and food prices, eased to 0.3% last month, down sharply from June’s 0.7% gain. Price pressures abated across energy categories, with gasoline down 7.7% in July from the prior month. Used-car prices, up sharply earlier in the pandemic, also dropped on a month-to-month basis, as did airline fares and apparel.
4. U.S. Jobless Claims Rise Slightly to New 2022 High — initial jobless claims, a proxy for layoffs, increased to a seasonally adjusted 262,000 last week from a revised 248,000 the previous week, the Labor Department reported. The weekly number has been on an upward trend since reaching a 50-year low in March. ontinuing claims, a proxy for the number of people receiving government unemployment payments, increased by 8,000 to 1.43 million in the week ended July 30. Continuing claims are reported with a one-week lag.
The new figures come as other signs indicate that the U.S. labor market remains strong even though the U.S. economy shrank in the first two quarters of this year, according to the Commerce Department, as rising interest rates and inflation took steam out of business and consumer spending.
The week ahead — Economic data from Econoday.com: