Athen Apaquette

This week brought us a few sighs of relief and a little worry about inflation but all in all, no market movers.

Monday: The March Personal Income report came out, and average income went UP 0.3%. Yet SPENDING went up 0.4%, so the average American is spending more than the increase in their income… This is true for many months out of the year. The Core PCE was up 0.2%, and that’s the one the Fed puts more weight on. This news was a little more robust than expected and put pressure on rates to rise.

Wednesday: The Fed met to analyze and discuss whether they felt that they might have to raise the short term rate (Prime rate) to keep inflation in check. They decided “no” and their outlook report held no big changes (they are on a watch and see). This was expected, but still, a little sigh of relief since there is a new chair to the Fed and some new members to the Committee since the end of the last Chair’s terms (Ms. Yellen).

Thursday: Q1 productivity was up 0.7%, unit labor costs were up 2.7%. This was milder than expected numbers, so no movement in rates.

Friday: JOBS JOBS JOBS… The Nonfarm payrolls gained 164,000 jobs, the unemployment rate dropped to 3.9%, and the average hourly wage went up 0.1%, all news that is too good, meaning it put upward pressure on rates. If the job market gets too much tighter, that will put even more pressure on wages rising, which will cause inflation. Keep a watch for better than expected news.