Record One-Month Climb in Consumer Credit, U.S. Labor Shortage Continues, and Does Slower Growth Lie Ahead?
July 9, 2021 | FIRESIDE CHARTS
Consumer credit set a record in May for the largest one-month increase, though the major decline in debt last year— spurred largely by stimulus payments—means it remains well-below its pre-Covid trend. The labor shortage in the U.S. remains an issue as the hires-to-openings ratio falls to a record low. Will these positions start to fill now that the pandemic-induced boost to unemployment benefits has been ended early in many states? Meanwhile, the bond market seems to have swung in a way that suggests a period of slower-than-expected (or slower-than-feared) growth and inflation could lie ahead. Yield curves continue to flatten, a trend seen around the world, as treasury yields slide and the 30-year UST yield dips below 2%. Looking globally, the ECB seems to be adopting the Fed’s appreciation for averages. How will the new philosophy come into play while wage inflation remains anemic in the Eurozone?
- Here we go! In May, U.S. consumers set a record one-month increase in credit card and auto loans:
Source: The Daily Shot, from 7/9/21
2. And there is plenty of gas in the tank, which should benefit financials:
Source: The Daily Shot, from 7/9/21
3. There are now the same number of job openings as there are unemployed Americans:
Source: The Daily Shot, from 7/8/21
4. A more hawkish tone from the Fed and moderation in many commodity prices have brought inflation expectations down sharply:
Source: Bloomberg, Arbor Research & Trading, from 7/9/21
5. Reasonably higher inflation has been historically beneficial to small-caps. Moderating inflation expectations are weighing heavily:
Source: The Daily Shot, from 7/9/21
6. Just like a tropical storm eventually weakens, has the Reddit crowd fallen apart? Note in bear market…
Source: The Daily Shot, from 7/9/21
7. The yield curve continues to flatten as long-term inflation expectations recede:
Source: The Daily Shot, from 7/8/21
8. What is “normal” for global bond yields?
Source: The Daily Shot, from 7/9/21
9. Junk bonds are at all-time lows in both spread and yield. Is this an “all clear” signal or is this due to a desperate search for yield?
Source: The Daily Shot, from 7/9/21
10. OPEC+ be damned; if prices stay at these levels, then U.S. shale production will “re-engage”:
Source: The Daily Shot, from 7/9/21
11. The ECB has moved more in-line with the Fed:
Source: The Wall Street Journal, from 7/9/21
12. Yet Europe does not have meaningful wage inflation like the States:
Source: The Daily Shot, from 7/9/21
13. Does China have a PR problem or is the world getting “fed-up” with their modus operandi?
Source: Statista, from 7/8/21
14. One in five new cars sold in the U.S. are now electric:
Source: The Daily Shot, from 7/8/21
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