August 11th, 2022 - Market Update
Current position: Carefully floating
Stocks and Bonds are both higher to start the day after a cooler than expected PPl report.
The Producer Price Index, which measures wholesale inflation, fell 0.5%, which was much lower than the 0.2% gain expected. Year over year, PPI declined from 11.3% to 9.8%.
The Core rate, which strips out food and energy prices, rose 0.2%, which was lower than estimates of 0.4%. Year over year the core rate fell from 8.2% to 7.6%.
Gasoline prices were down 17% and attributed for 80% of the headline decline.
Initial Jobless Claims, which measures individuals filing for unemployment benefits for the first time, increased by 14,000 to 262,000, which is just slightly higher than last week before the downward revision.
The four-week moving average, which removes some of the noise, edged higher and is at the highest level since late November. This report can be the "canary in a coal mine" to show that the jobs market is starting to soften, although jobs data is a lagging indicator.
Continuing Claims, which measures those who continue to receive benefits after their initial claims, rose 8,000 to 1.43 million, which is the highest level since the beginning of April.
Source: MBS Highway
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