The number of Americans filing new claims for unemployment benefits have jumped to a 1-1/2-year high, pointing to cracks in the labor market as demand slows, potentially giving the Federal Reserve room to halt further interest rate increases next month. With demand cooling, inflation pressures are subsiding. Data from the Labor Department indicates that producer prices rebounded modestly in April, leading to the smallest annual increase in wholesale inflation in more than two years.
In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.
They discuss a Labor Department report showing that the consumer price index (CPI), which measures the cost of a broad swath of goods and services, increased 0.4% for the month, in line with the Dow Jones estimate.
Chris and Saied look at comments from JPMorgan Chase CEO Jamie Dimon that markets will be gripped by panic as the U.S. approaches a possible default on its sovereign debt, calling the default "potentially catastrophic" for the country.
They also offer some thoughts on a statement by New York Federal Reserve President John Williams, who cautioned that interest rate increases will take a while to work their way through the economy before inflation returns to an acceptable level.
Join Chris and Saied for this fascinating and informative conversation.
Enjoy!
What You’ll Learn in this Show:
- Why services inflation is really consumer discretionary spending more than anything else.
- Why housing prices are excluded from the Labor Department’s CPI report.
- The odds of a Fed rate cut this year.
- Why the Fed's 'stress tests' for banks failed.
- And so much more...
Resources:
"Jamie Dimon warns panic will overtake markets as US approaches debt default" (CNBC via Instagram)
"The family behind First Citizen's Bank is $1 billion richwer since SVB" (Bloomberg Business via Instagram)
"AirBnB stock craters - founders lose $4 billion in one day" (Forbes via Instagram)
"Inflation rate eases to 4.9% in April, less than expectations" (CNBC)
"Wholesale prices rose just 0.2% in April, less than estimate as inflation pressures ease" (CNBC)
"Fed’s John Williams says rates could be increased if inflation doesn’t come down" (CNBC)
"Worries linger about financial stability following bank rescue, Fed report shows" (CNBC)
"US weekly jobless claims hit 1-1/2-year high; inflation subsiding" (Reuters)
"Brits are being offered no-deposit 100% mortgage loans for the first time since 2008" (CNBC)
"We May Be Getting Used to High Inflation, and That’s Bad News" (The Wall Street Journal)
"Icahn, Under Federal Investigation, Blasts Short Seller" (The Wall Street Journal)
"Inflation Eased in April but Remains Stubbornly High" (The Wall Street Journal)
"Can Inflation Fall Fast Enough for the Fed?" (The Wall Street Journal)
"How the Fed’s stress tests failed to stop a banking crisis" (Fortune)
"Monthly Mortgage Payments Could Surge 22% If US Defaults" (Bloomberg)
