Weekly economic update for May 9, 2022


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


economy
  • The S&P Global U.S. Composite PMI Output Index fell to 56.0 in April from 57.7 in March.
  • Factory orders grew 2.2% in March, the Census Bureau noted.
  • The Census Bureau found the goods and services trade deficit increased in March.


Employment
  • The U.S. added 428,000 jobs in April and the unemployment rate remained unchanged at 3.6%, according to the Bureau of Labor Statistics.
  • Initial claims rose by 19,000 to 200,000 in the week ended April 30, 2022, the Department of Labor reported.


Profits
  • As of April 29, 2022, of the 264 S&P 500 Index companies that reported first-quarter earnings, 209 beat analysts’ estimates, according to S&P Dow Jones Indices.


Emotion
  • The European Commission’s Economic Sentiment Indicator for the euro area declined in April.


Europe
  • Euro area industrial producer prices rose 5.3% in March compared with February, Eurostat noted.
  • Eurostat stated euro area retail sales fell 0.4% in March.
  • Germany’s Federal Statistical Office noted factory orders declined 4.7% in March compared with February.


Rates
  • The yield on the 10-year Treasury note rose.
  • The Federal Reserve raised the target range for the federal funds rate by half a percentage point to 0.75% to 1.0%.


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, should lead 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.