By the Co-op SmartGrowthTM Team
June showed unexpectedly strong job gains of 372,000, keeping unemployment at a
low 3.6%, identical to May’s level. Wages also climbed by 5.1% on an annualized basis.
However, other economic indicators are not as encouraging. Retail sales slowed by 0.3% in May,
and consumer sentiment fell to its lowest level in 70 years. In perhaps the biggest news,
inflation jumped up to a 9.1% annual rate in June, hitting a new 40-year high.
The bond market is now in a yield curve inversion, a sign that bond investors
are predicting an impending economic slowdown. Meanwhile, in an effort to combat rising
inflation, the Federal Reserve raised its benchmark lending rate by three-quarters of a percentage
point at its June meeting, and Fed watchers expect additional rate hikes later this year.
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