The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
By Elliot D. Pollack & Co. | Rose Law Group Reporter
For two years now, the “Economic Disruptions” bingo card has nearly filled up. If it’s not one thing, it’s another. The Omicron variant of COVID was waning and jobs have been recovering rapidly. But supply chain issues have persisted and combined with a lot of money in the system and highly stimulative fiscal policy, inflation pressure took center stage.
Now, another invasion by Russia and geopolitical turmoil have caused oil and gasoline prices to spike. This is on top of already elevated prices that have been increasing steadily since February 2021 after recovering from the drop due to COVID lockdowns.
While now long expected, the Fed will most likely maintain its course to increase the federal funds rate this week and stop purchases of treasury bonds and mortgage-backed securities with the design of tightening monetary policy and moderating inflation.
For the consumer, all of this means that the price of goods and services has and will continue to go up, as will borrowing costs. The dampening effect will be substituting disposable income planned for “extras” like eating out, shopping, and travel to cover the increased cost of necessities like rent, groceries, and gas. The increased cost of borrowing could also decrease the pool of buyers for homes and automobiles.
U.S. Snapshot:
- The Blue Chip Economic Indicators lowered their 2022 and 2023 GDP forecasts as COVID fears eased, but inflation and international turmoil brought added disruptions to the U.S. economy. The forecast for 2022 was lowered to 3.5% from 3.7%. In 2023, the U.S. economy is expected to grow at 2.5%.
- Job openings declined in January but remained above 11 million. The number of jobs outnumbered the number of people available to fill those jobs by nearly 5 million. The number of new hires outpaced separations by 6.5 million to 6.1 million, but the number of quits remained elevated at 4.25 million.
- Inflation continues to squeeze consumers as the crisis in Ukraine continues. Overall inflation was up 7.9% in February from a year earlier. Core-inflation was up 6.4% for the year.
- Consumer sentiment fell in the first half of March as the Russian invasion of Ukraine, inflation, and the rapid acceleration of fuel prices. The sentiment level fell to 59.7% down 4.9% from last month and 29.7% from a year ago.
- Consumer sentiment fell in the first half of March caused by economic shocks such as the Russian invasion of Ukraine, inflation, and the rapid acceleration of fuel prices. The sentiment level fell to 59.7% down 4.9% from last month and 29.7% from a year ago.
Arizona Snapshot:
- The Arizona Office of Economic Opportunity released new benchmark data for 2020 and 2021. Arizona’s employment was revised upward, 3,200 in 2020 and 12,500 in 2021.
- For the year, the state was up 127,400 jobs with Leisure & Hospitality representing the largest increase. The major metros saw an increase of 91,300 and 16,200 in Greater Phoenix and Greater Tucson, respectively.
