Registered Investment Adviser Caleb Lawrence
The markets stumble into the final hour with large losses after Trump officially kicks off the trade war with tariffs slapped on Canada, Mexico, and Europe. I would expect that the Chinese won’t be far behind.
The Beige Book came out late yesterday and shows essentially more of the same, moderate economic growth. Increases in manufacturing were offset by less consumer spending, but nothing remarkable.
Agricultural prices slipped 2.2% in April on weakness in commercial vegetable prices, they fell 19% and to a lesser extent poultry, egg, meat animals and fruit prices. On a year ago basis agricultural prices are down 3.1%.
The inflation measuring Personal Consumption Expenditures or PCE Deflator gained .2% in April on a large jump in gasoline and energy prices. On a year ago basis the series was unchanged at +2%. Essentially the Fed’s desired target, which you don’t hear about much anymore. Personal income advanced .3% in April, strength was seen in wages and salaries, all other categories except for small business income also did well. On a year ago basis income is up 3.8% a little less than double the inflation rate as per PCE. Personal spending increased .4% in April, slightly ahead of income and pushing the savings rate down to 2.8%. Again the recent gains are being driven by Trumps deficit financed tax cut, that primarily benefits the wealthy and corporations.