Week in Review: May 9-13
This week ushered forth more market mayhem, a long-awaited crypto crash, and some additional insight into inflation’s trajectory. Oh, also war, rumors about Xi’s longevity in China, and some more subpoenas.
Senior Loan Officer Survey on Bank Lending Practices
This is a particularly unexciting piece of economic data, but after watching our retirement accounts tank, unexciting is just fine. The only big takeaway here is that “banks eased standards across most categories of residential real estate (RRE) loans and home equity lines of credit (HELOCs) over the first quarter, while also reporting weaker demand for all types of RRE loans but stronger demand for HELOCs on net.” Before you panic about a housing bubble: lending standards remain very high (see page 6). The issue here is that interest in mortgage making has dropped like bitcoin on fire, and so banks are trying to push demand higher at the margin.
NFIB Business Optimism Index
Small business confidence inched toward its lowest level since April 2020 (that was a bad month, remember?). The share of small business owners expecting better business conditions over the next half year declined to its lowest level during the 48-year history of the survey. Inflation is clearly hitting small businesses very hard and labor issues remain a pressing concern—47% of small business owners have job openings they couldn’t fill in April. C’mon America!
U.S. stocks of distillate fuel oil (think diesel), which were already at the lowest level since 2005, fell again last week and are now down 0.9% on a weekly basis, 9% on a monthly basis, and 22.6% on a yearly basis. Diesel prices continue to soar as a result, up another 2.1% for the week ending May 9. On the East Coast, where shortages are particularly severe and very important things occur, distillate stocks fell another 4.8%. This does not bode well for inflation in coming months, though it does make for a nice transition into our next indicator.
Consumer Price Index
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