Weekly economic update for August 1, 2022


Highlights of key economic statistics from last week compiled by Putnam Investments.


economy
  • GDP decreased at an annual rate of 0.9% in the second quarter, the Bureau of Economic Analysis reported.
  • New home sales dropped 8.1% in June compared with May, the Census Bureau found.
  • Durable goods orders increased 1.9% in June, the Census Bureau stated in an advance report.


Employment
  • Initial jobless claims fell by 5,000 to 256,000 in the week ended July 23, 2022, the Department of Labor found.


Profits
  • As of July 22, 2022, of the 103 S&P 500 Index companies reporting second-quarter earnings, 76 beat analysts’ expectations, according to S&P Dow Jones Indices.


Emotion
  • The Conference Board Consumer Confidence Index declined in July.


Europe
  • The European Commission’s Economic Sentiment Indicator plunged in July.
  • Euro area GDP increased 0.7% in the second quarter, according to a flash report from Eurostat.
  • In a flash estimate, Eurostat noted euro area annual inflation is expected to rise to 8.9% in July from 8.6% in June.


Rates
  • The yield on the 10-year Treasury note declined.
  • The Federal Reserve raised the target range for the federal funds rate by 75 basis points.


Risks
  • Rising energy prices, worsened by the Russia-Ukraine War, increase the risk of stagflation and recession, even as central banks seek monetary policy normalization.
  • Declining liquidity and deteriorating financial conditions, combined with high valuations, are contributing to a substantial uptick in risk asset volatility.
  • Global leverage is at worrisome levels and will eventually need to be paid for, at a time when most developed markets are facing a fiscal drag from the end of post-pandemic stimulus.


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All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.