Weekly economic update for August 15, 2022


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


economy
  • The CPI remained unchanged at 1.3% and core CPI rose 0.3% in July compared with June, the Bureau of Labor Statistics found.
  • The Producer Price Index for final demand fell 0.5% in July, the Bureau of Labor Statistics reported.
  • Import prices fell 1.4% and export prices dropped 3.3% in June, according to the Bureau of Labor Statistics.


Employment
  • Initial jobless claims rose by 14,000 to 262,000 in the week ended August 6, 2022, the Department of Labor found.


Profits
  • As of August 4, 2022, of the 408 S&P 500 Index companies reporting second-quarter earnings, 305 beat analysts’ expectations, according to S&P Dow Jones Indices.


Emotion
  • The NFIB Small Business Optimism Index edged up in July but remained below its historical average.


Europe
  • Eurostat reported euro area industrial production increased 0.7% in June compared with May.
  • Germany’s Federal Statistical Office noted the inflation rate rose 7.5% year over year in July.
  • The United Kingdom’s Office for National Statistics reported GDP is estimated to have fallen 0.1% in the second quarter.


Rates
  • The yield on the 10-year Treasury note traded in a range.


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.