For our 2018 Quarter 2 Market Commentary, we want to focus on some recent facts concerning the U.S. economy that leave us seeing the glass half full. We will be looking at three key indicators: Consumer Price Index (CPI), Job Openings and Labor Turnover (JOLT) Report and International Capital Flows.
Consumer Price Index (CPI) – increased only 0.2% in February and is up just 2.3% over the past year. So-called “core CPI” – which excludes food and energy prices – has gained a modest 1.9% year-over-year. The February numbers regarding inflation are within the range the Federal Reserve has set for our economy to grow, but not overheat.
Job Openings and Labor Turnover (JOLT) Report – this monthly report showed a significant increase in available job openings (6.3 million) in January. There were 5.4 million new hires and 5.2 million separations (discharges and quits) during the month, which reflects the tremendous dynamic of the U. S. economy. We see a strong economy with new jobs ranging somewhere between 200,000 to 300,000 new each month.
International Capital Flows – Foreign investors – individuals, institutions, and governments – poured $62.1 billion into domestic securities. Even more interesting was the fact that $34.5 billion went into common stocks instead of the usual Treasury and agency bonds. The fact that foreign investors are investing in American businesses, not just bonds, is an even bigger vote in the US economy!