Inflation readings continue to run hot, but market-based inflation expectations remain relatively contained and we believe inflation may be at or near a peak. We expect supply chain bottlenecks will continue to put upward pressure on prices over the near-term but should improve next year.
Job growth was weaker than expected in November, but the unemployment rate still declined four tenths of a percent to 4.2%. We believe a variety of factors are keeping some workers out of the labor force, which has likely held back job growth despite strong demand from employers.
This week’s economic data was mostly favorable. Though high inflation, supply chain constraints, and the ongoing health crisis continue to impact the overall economy, recent data supports the view that economic growth has picked up in the current quarter.
