Weekly Market & Economic News Recap (Week of April 3, 2023)

• U.S. stocks ended the holiday-shortened week in subdued fashion Thursday, recovering from early losses after new jobless-claims data suggested that layoffs have recently increased more than previously thought. (Wall Street Journal, April 6, 2023, https://www.wsj.com/articles/global-stocks-markets-dow-update-04-06-2023-625f10f?mod=markets_major_pos10)

• Treasury yields climb after strong jobs report. Investors now think there is a roughly 70% chance that Fed will raise rates by 0.25 percentage point in May. U.S. government bond prices fell Friday, pushing yields higher, after the latest jobs numbers suggested that there remains substantial demand for workers despite some recent signs of a weakening economy. (Wall Street Journal, April 7, 2023, https://www.wsj.com/articles/treasury-yields-climb-after-strong-jobs-report-824ae4df?mod=markets_major_pos13)

• Job market softens only a bit, keeping fed on track for may hike. Nonfarm payrolls rose 236,000 in March, in line with forecast. Participation rates up to three-year high, helping labor supply. (Bloomberg, April 7, 2023, https://www.bloomberg.com/news/articles/2023-04-07/us-payroll-growth-cools-wages-climb-in-mixed-signal-for-fed?srnd=economics-v2)

• US inflation was largely unwavering in March, with economists projecting a monthly increase in consumer prices on par with advances seen over the previous half year that will test the Federal Reserve’s mettle. Government figures Wednesday are expected to show a 0.4% monthly gain in the core consumer price index, which excludes food and energy and better reflects the scope of underlying inflation facing American households. (Bloomberg, April 7, 2023, https://www.bloomberg.com/news/articles/2023-04-08/us-consumer-inflation-data-imf-and-world-bank-spring-meetings?srnd=economics-v2)

• US consumer borrowing grew in February at a more moderate pace, held back by the smallest increase in credit-card balances in nearly two years. Total credit increased $15.3 billion after an upwardly revised January gain of $19.5 billion, Federal Reserve data showed Friday. The figure, which isn’t adjusted for inflation, compared with the median estimate of an $18 billion increase in a Bloomberg survey of economists. (Bloomberg, April 7, 2023, https://www.bloomberg.com/news/articles/2023-04-07/us-consumer-credit-increased-in-february-at-a-more-moderate-pace)

• US bank lending slumps by most on record in final weeks of March. Loans by commercial banks declined by nearly $105 billion. Deposits at US banks decreased for a 10th-straight week. A $1.5 trillion wall of debt is looming for US commercial properties. Morgan Stanley sees refinancing risks front and center. Office, retail property valuations could fall as much as 40%. (Bloomberg, April 8, 2023, https://www.bloomberg.com/news/articles/2023-04-08/a-1-5-trillion-wall-of-debt-is-looming-for-us-commercial-properties?srnd=economics-v2)