Weekly Economic & Financial Commentary: Omicron Not Enough to Crash the Payroll Party

Summary

United States: Omicron Not Enough to Crash the Payroll Party

This week ushered in a broad range of economic indicators that covered everything from supply chains to the housing market, but needless to say it was the labor market that was top of mind. Nonfarm payrolls rose 467K in January, which was not only nearly four times the consensus estimate but also well ahead of any forecast. JOLTS and nonfarm productivity pointed to a strong and thriving labor force, while January’s ISM surveys and construction spending data affirmed that we are not out of the woods yet when it comes to supply chain struggles and higher prices.
Next week: NFIB Small Business (Tuesday), Trade Balance (Tuesday), CPI (Thursday)

International: Central Banks Take Center Stage

The Bank of England delivered a hawkish monetary policy announcement, raising its policy rate by 25 bps, but with several policymakers dissenting in favor of a larger move. Given the hawkish announcement, we now expect the Bank of England to raise rates by more and earlier than previously. The European Central Bank held monetary policy steady but said inflation risks were to the upside, signaling it would re-assess its policy outlook in March.
Next week: Brazil CPI (Wednesday), Mexico Overnight Rate (Thursday), U.K. GDP (Friday)

Interest Rate Watch: Shrinking Budget Deficit Leads Treasury to Issue Less Debt

The federal budget deficit is narrowing sharply, and as a result, the U.S. Treasury announced this week that it would continue cutting the size of its Treasury security auctions, given the declining financing need.

Topic of the Week: Economic Resiliency and Progress in the Black & African American Community

The Black and African American community in the United States has faced significant structural obstacles over the past few centuries that have impeded full economic participation. In commemoration of Black History Month, we look at the recent economic progress the Black and African American community has made, despite these obstacles.