Weekly economic update for August 8, 2022


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


economy
  • The goods and services trade deficit declined in June, according to the Census Bureau.
  • Construction spending fell 1.1% in June compared with May, the Census Bureau stated.


Employment
  • Initial jobless claims rose by 6,000 to 260,000 in the week ended July 30, 2022, the Department of Labor found.
  • The U.S. added 528,000 jobs and the unemployment rate fell to 3.5% in July from 3.6% in June, according to the Department of Labor.


Profits
  • As of July 29, 2022, of the 278 S&P 500 Index companies reporting second-quarter earnings, 209 beat analysts’ expectations, according to S&P Dow Jones Indices.


Emotion
  • Consumers expect economic growth will be more negative and unemployment will rise in the next 12 months, according to the European Central Bank’s Consumer Expectations Survey.


Europe
  • The S&P Global Eurozone Composite PMI Output Index fell to 49.9 in July from 52.0 in June.
  • Eurostat found euro area industrial producer prices climbed 1.1% in June compared with May.
  • Eurostat reported euro area retail trade fell by 1.2% in June compared with May.


Rates
  • The yield on the 10-year Treasury note increased.
  • The Bank of England raised the bank rate to 1.75%.


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.