Inflation Fever is Breaking

August 29, 2022

Believe it or not, summer is almost over and what a whirlwind it has been! In the world of economic news, I found this Bloomberg story, Inflation Fever is Finally Breaking–But Central Banks Won’t Stop Hiking Rates, a good summary of where we find ourselves now. Commodity prices have begun to cool, notably oil, copper, and wheat. However, wage inflation persists especially in labor-intensive services, as do rental housing prices due in large part to inventory shortages or affordable options.

The Federal Reserve Bank is keeping a watchful eye on things, and many believe—based upon reports last week from Jackson Hole, Wyoming—that we may see another bump in borrowing rates next month. Other countries are doing just that, and the Fed may do similarly. While supply chain woes and shipping backups are easing somewhat, it looks like the Fed believes they have more to do. Some economists are saying that “globalization is fraying” as industries re-shore, and others worry about a “wage-price spiral.”

Here in Delaware, we’ll keep measure of how this is affecting your business and employees.

Uniquely Delaware

Delaware Monthly Labor Review - July 2022

Delaware continued its job growth trend in July, increasing by a net 11,800, or 2.6%, over July 2021 and by a net 1,900 jobs, or .4%, over June 2022. Year-to-date job growth has increased by a net total of 9,700 workers. Leisure and hospitality again led July's growth, adding 7,800 jobs over-the-year prior, followed by the trade, transportation and utility and manufacturing sectors, which increased by a net 2,100 and 1,700 jobs since July 2021, respectively. The State's labor force participation (LBF) rate declined by a 0.1 percentage point to 61.1%, its lowest level since November 2020. View report >

News You Can Use

Interesting economic trend data for the week kicks off tomorrow with the S&P Case-Schiller home price index, and July job openings and quit results. On Wednesday, ADP presents its August employment report. Thursday is September 1st and we’ll see a variety of key data points ranging from August jobless claims, light motor vehicle sales, and July construction spending. We wrap up the week on Friday with August unemployment figures, labor force participation rates, and July factory orders.

State Chamber member Best Buy kicks off the week of earnings calls on Tuesday, and is joined by HP, and Big Lots. Wednesday calls include Brown-Forman, Cooper, and Five Below. Campbell Soup, Hormel Foods, and Toro are other noteworthy calls this week.