Weekly economic update for July 5, 2022


Highlights of key economic statistics from last week compiled by Putnam Investments.


economy
  • GDP decreased at an annual rate of 1.6% in the first quarter, the Bureau of Economic Analysis reported.
  • Durable goods orders increased 0.7% in May, the Census Bureau stated in an advance report.
  • Consumer spending rose 0.2% in May, according to the Bureau of Economic Analysis.


Employment
  • Initial jobless claims fell by 2,000 to 231,000 in the week ended June 25, 2022, the Department of Labor stated.


Profits
  • Corporate profits decreased 2.2% in the first quarter, after increasing 0.7% at a quarterly rate in the fourth quarter, the Bureau of Economic Analysis found.


Emotion
  • The Conference Board Consumer Confidence Index fell in June.


Europe
  • Eurostat reported euro area inflation is expected to rise to 8.6% in June from 8.1% in May.
  • The European Commission’s Economic Sentiment Indicator for the euro area declined in June.
  • Germany’s Federal Statistical Office stated export prices increased 0.6% in May compared with April.


Rates
  • The yield on the 10-year Treasury note declined.


Risks
  • Rising energy prices, worsened by the Russia-Ukraine War, increase the risk of stagflation and recession, even as central banks seek monetary policy normalization.
  • Declining liquidity and deteriorating financial conditions, combined with high valuations, are contributing to a substantial uptick in risk asset volatility.
  • Global leverage is at worrisome levels and will eventually need to be paid for, at a time when most developed markets are facing a fiscal drag from the end of post-pandemic stimulus.


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All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.