Saturday,
May 4, 2024
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The week in review
• On the inflation front, the Fed’s preferred inflation measure, core PCE, rose 2.8% year-over-year, and 0.3% from February. The same report also showed personal spending jumping 0.8% in March, while incomes rose only 0.3%.
• Despite hotter-than-expected inflation data in the first quarter, Fed Chair Jerome Powell on Wednesday reassured markets that raising interest rates was not likely.
• In the labor market, U.S. employers announced just under 65,000 job cuts in April, a 28% decrease from the previous month, while first-quarter labor productivity increased less than expected at 0.3%, and labor costs rose 4.7%.
For more economic news, visit On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Breaking down the Fed meeting
The Federal Reserve left interest rates unchanged on Wednesday, much as investors had predicted. The Fed cited a lack of progress on the inflation front, saying the recent string of hotter-than-expected inflation data suggest it will take longer to start cutting rates.
But much to the market’s relief, Fed Chair Jerome Powell also didn’t mention that the central bank would hike rates further to combat the persistently sticky inflation we’re seeing in the data.
“In fact, great effort was made to reinforce that a hike was quite unlikely in the months to come,” writes SoFi Head of Investment Strategy Liz Young.
With inflation still high, worries about the state of the American consumer — the backbone of the U.S. economy – have been on the rise. Read on for this week’s column that digs into what to watch and what might be less worrisome for now.
This week’s top stories
Stagflation worries revisitedThe economy needs consumers to spend money, but high and persistent inflation makes this a bigger and bigger ask.
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