STRONG MARCH LABOR REPORT: U.S. employers added a net 431,000 jobs in March. The unemployment rate is now 3.6%. As you can see below, the COVID-induced jobs recession was the worst in the post-war period. However, 25 months in, we are almost back to pre-pandemic levels of employment (still 1.6 million jobs to go). The Labor Force Participation rate ticked up again from 62.3% to 62.4%. In the 25-to-54 age group, the participation rate increased from 82.2% to 82.5%. Women made up about 70% of March’s new jobs. However, the male labor-force has now fully recovered while the amount of women in the labor force is still below the pre-pandemic levels.
(Sources: bls.gov/news.release/empsit.nr0.htm AND wsj.com/articles/march-jobs-report-unemployment-rate) |
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| EKING OUT A POSITIVE WEEK: Buoyed at the end of the week by a positive U.S. jobs report, the S&P eked out a positive week. The quarter closed out as the worst since the beginning of the COVID disruption in 2020, down about 5% for the first three months of the year. Despite signs of a strong and growing economy, inflation, and its inherent dangers to the overall economy, continue to weigh on this market. |
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CONSTRUCTION SPENDING STILL CLIMBING: We have a shortage of available homes, and construction spending is soaring. Last month, overall construction spending in the U.S. increased by 0.5% from the month before. Private construction rose 0.8% and public construction rose 0.4%. As you can see from the graph below, most of the recent surge is residential, which is sorely needed. Private residential construction is up 16.6% from this time last year.
(Source: census.gov/construction/c30/pdf/release.pdf) |
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| EUROZONE INFLATION: The eurozone’s inflation jumped to 7.5% in March as the invasion of Ukraine pushed energy and food prices higher. This is the highest inflation in this block of nations since 1997 when the eurozone started keeping records. Energy prices are 44.7% higher than a year ago. Europe gets about 40% of its natural gas and 25% of its oil from Russia. While this has not been interrupted, the threat of interruption is wreaking havoc with prices. |
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MORTGAGE RATES CLIMBING: One thing that will slow down the rise in home prices is a rising interest rate environment. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage loan rose to 4.67% this past week, its highest reading since 2018. At the beginning of the year, we were at approximately 3.2%. Mortgage refinancing is slowing down considerably, but so far the amount of mortgage loan applications submitted by homebuyers continues to increase. We’ll see if that trajectory continues. Meanwhile, below you can see the recent dramatic rise, but in the second graph you can see that we are still in a historically low range.
(Sources: wsj.com/market-data/quotes/FMCC AND YCharts.com) |
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CONTINUING TO WATCH THE DATA: The number of people dying in the U.S. who are COVID positive continues to plunge, down another 22% last week. Global deaths were down another 20% last week and are at the lowest level since March of 2020. (Bottom graph below).
(Source: worldometers.info/coronavirus) |
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| HOSPITALIZATIONS AND GLOBAL INFECTIONS: The number of patients in U.S. hospitals who are COVID positive dropped another 21% last week (see graph below). According to Johns Hopkins University of Medicine, the amount of COVID ICU beds in use in the U.S. last week was 2,524, the lowest number since they began keeping records. U.S. infections have gone from about 800,000 per day in mid-January to less than 28,000 currently and continuing to fall. Worldwide, South Korea’s infection rate has peaked after a very sharp rise (that’s what omicron does) and the worldwide infection is dropping decisively once again (down 14% last week). (Sources: covid.cdc.gov/covid-data-tracker AND worldometers.info/coronavirus/ AND coronavirus.jhu.edu/data/hospitalization-7-day-trend). |
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| HALF THE FUN IS IN THE PLANNING: Travel was curtailed during COVID, and is now opening up more and more. If you read this email regularly, you know that my wife and I braved COVID and went to Italy last November. I enjoy the planning almost as much as the trip. In 2019, we went to Ireland and last year Italy. In both cases, prior to the trip I learned quite a lot about each country and its geography and history. Of course, I learn even more when there. Currently, we are planning our next couple of trips. In this era, you are never 100% sure they will actually happen, but you still have to plan. If all goes well, I’ll be including pictures from my May trip to a continent I’ve never been to. Stay tuned. |
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Our mission is to help you see the objective, find the path, and navigate past the obstacles to a more prosperous future.
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Douglas R. MacGray, J.D., C.F.P. ®
President
Stonecrop Wealth Advisors, LLC
225 Wilmington-West Chester Pike; Suite 200
Chadds Ford, PA 19317
Direct | Cell | Fax
(610) 628 4545
dmacgray@stonecropadvisors.com |
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| “What if doing well and doing good were a seamless reality?” Steven Garber, The Seamless Life
“Well then, you should have put my money on deposit with the bankers, so that when I returned, I would have received it back with interest.” Matthew 25:27 (NIV) |
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SOURCES:
EUROZONE INFLATION: wsj.com/articles/eurozone-inflation-hits-new-record-raising-pressure-on-ecb |
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| (c) 2022 Douglas R. MacGray, All Rights Reserved |
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*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.
*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.
*Bloomberg Barclays U.S. Aggregate: This is a measure of the U.S. bond markets. |
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