Weekly economic update for June 27, 2022


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


economy
  • Existing home sales dropped 3.4% in May compared with April, the National Association of Realtors found.
  • New homes sales rose 10.7% in May compared with April, the Census Bureau reported.


Employment
  • Initial jobless claims fell by 2,000 to 229,000 in the week ended June 18, 2022, the Department of Labor reported.


Profits
  • As of June 17, 2022, the estimated earnings growth rate for the S&P 500 is 4.3% for the second quarter, according to FactSet.


Emotion
  • The University of Michigan’s index of consumer sentiment dropped to 50.0 in June from 58.4 in May.
  • The European Commission’s Flash Consumer Confidence Indicator for the euro area declined in June.


Europe
  • The S&P Global Flash Eurozone PMI Composite Output Index dropped to 51.9 in June from 54.8 in May.
  • The United Kingdom’s Office for National Statistics noted the CPI increased 7.9% in the 12 months to May.
  • Eurostat reported euro area construction output fell 1.1% in April compared with March.


Rates
  • The yield on the 10-year Treasury note declined.


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.