11 Sep September 11, 2020
Week in Review
Inflation
Consumer prices rose 0.4% in August while producer prices increased 0.3%. Year-over-year, consumer prices are up 1.3% and producer prices have fallen 0.2%.
Our Take: Inflation in August was slightly more than expected as the economy continues to recover. Inflation remains well below the Fed’s 2% target and will need to rise above 2% before the Fed adjusts rates. This seems unlikely for the foreseeable future.
Employment
884,000 people filed initial unemployment claims in the week ending September 5. Continuing claims totaled 13.3 million for the week ending August 25.
Our Take: Initial claims were basically unchanged for the week while continuing claims ticked higher. Job growth has slowed recently as most of those who could return to work easily are back. The long-term economic recovery from the pandemic related shutdowns hinge largely on shrinking the unemployment rate. It appears this may take a while.
Municipals
The New York Metropolitan Transportation Authority warned that it may be forced to lay off employees and cut service if the agency does not receive federal aid. The MTA has requested $12 billion in aid to help cover the agency’s deficit due to the pandemic. It is estimated that the MTA is losing $200 million per week due to the ridership decline during the pandemic.
Our Take: MTA officials have stated that federal aid is necessary as the region recovers from the pandemic and any cuts to service would hinder the economic recovery. Changes to the MTA workforce and the transportation service would likely be made before the agency’s board meeting in November which will focus on the 2021 budget.
All expressions of opinions are subject to change without notice in reaction to shifting market conditions. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities and should not be relied on as financial advice.