April – May 2021

U.S. Economic and Market Highlights

The Economy:

  • The rise in GDP reflected an acceleration of the economic recovery and was sparked by a 10.7% surge in consumer expenditures, which is the largest component of the U.S. domestic economy. Similar trends are evident in Europe, just lagging the U.S. by several months.
  • The broad commodity price increase has been driven by an acceleration of global economic growth, improving consumer confidence, rising housing prices, and instances of supply constraints.
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March – April 2021

U.S. Economic and Market Highlights

The Economy

  • The inflation debate is on! Fed Chair Powell noted the economic recovery was progressing well and that bouts of rising inflation in 2021 should be “transitory”.
  • Commodity prices have risen significantly including copper, iron ore, lumber, and wheat resulting in increased prices for food, durables, housing, and new construction.
  • The question is whether wages will increase and if companies will be able to pass along higher prices to consumers. The change in private-sector nominal average hourly earnings is well below the CPI inflation rate thus far in the recovery. This story has not yet played out.
  • Central banks remain accommodative by keeping interest rates near record lows, which has elevated investor risk-taking to seek higher rates, equity valuations, economic growth, corporate sales, consumer spending, and employment.
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