Weekly Economic Update: April 4th, 2022
• The yield curve flattened during the week with the two-year Treasury note rising by 18 basis points to 2.46% while the five-year note increased by only one basis point to 2.56%.
• The March jobs report showed that the economy added 431k workers to payrolls versus an expected 490k, however the previous two months were revised upward generously adding another 95k to January and February combined.
• Personal income increased by a formidable 0.5% but unfortunately, the consumption price deflator increased by 0.6% handing a purchasing power loss to the consumer for a seventh consecutive month – the longest stretch in almost half a century.
• With real spending firmly in negative territory, prices are crimping demand as durable goods sales displayed the largest contraction in consumption for the month falling by 2.5%, a testament to the surge in inflation as the run up in goods prices has more than doubled that of services over the past year at 9.6% versus 4.6%.