Markets “In a Nutshell” for August 16, 2021
Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 0.90%, the S&P 500 was up 0.70%, and the NASDAQ fell 0.10%. Foreign stocks (MSCI EAFE) were also up, increasing 0.80%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 1.29%. (Data source: Wall Street Journal)
New Inflation Data
Last week the July inflation numbers were released. As expected we saw another month of high year over year price increase. CPI rose 5.4% year over year and Core CPI, which excludes food and energy, rose by 4.3%. These numbers did not have much of an instant impact on markets as they were expected and Core CPI declined from last month’s reading. Many of the price increases we are seeing are from parts of the economy that are reopening such as airfare and restaurants. Food away from home rose the most since February of 1981 due to labor shortages and rising wages. Used cars sales are also still very hot as the shortage of new cars continues due to a lack of supplies to manufacture new cars. Overall these inflation numbers came in as expected and as of now seems inflation may be staying steady compared to the sharp spike we saw earlier this year.
Economic Expansion
In looking at the economy currently, we are well ahead of where we were after the last recession. After the Global Financial Crisis, it took the United States six years before we returned to pre-crisis employment numbers. Currently we are at 5.4% unemployment which is less than 2% from pre-pandemic levels of unemployment. There are also currently more job openings in the United States than people unemployed, so as we work our way into the Fall with school starting back up and additional unemployment benefits expiring it is expected the unemployment number continues to climb back to pre-pandemic levels.
Quiz:
Quiz
How many more job openings than unemployed people are there currently? (Scroll Down for Answer)
Answer below.
Have a Great Week!
Answer:
2. 1,100,000, there are currently 8.7 million people unemployed and 9.8 million job openings in the United States.