Macro Overview June 2021

Kent Forsey, CFP® American Workers, Cyberattacks, Economic Impact, Inflation, Macro Overview, Scams, US Workforce, Vaccination

The market is said to always be climbing a “wall of worry.”  Here are the current issues that are creating a new wall or helping to take down previous “walls of worry.”

Financial global markets are drawing support from the effectiveness of ongoing vaccinations and improving economic signs.  Consumer sentiment is re-evolving, resulting in rising consumer demand as pandemic anxieties wane.  Repressed demand from the past year is thought to be driving the bulk of economic activity.

Ransomware cyberattacks and internet crimes have been rising at a disconcerting rate according to the FBI, threatening companies, government entities and individuals.  Digital currencies, such as bitcoin, are the primary form of payment utilized for ransom and extortion cases since payments can be made anonymously and are not traceable.  The FBI encourages individuals, especially elders, to be aware of numerous online scams and phone calls by visiting the Commons Scams & Crimes site – https://www.fbi.gove/scams-andsafety/commons-scams-and-crimes.com.

Escalating inflation concerns prompted Federal Reserve members to consider limiting purchases of Treasury and mortgage bonds, which is an indirect method of raising inflations rates.  The decrease in stimulus efforts, also known as tapering, last occurred in 2013.

The administration released a proposed $6 trillion federal budget for the upcoming fiscal year, expected to be funded by higher taxes for top earners and corporations.  Analysts, as well as nonpartisan analysts, expect additional issuance of Treasury debt in order to help fund ongoing federal deficits.

Various states, including Arizona, are ending supplemental unemployment benefits instituted during the early months of the pandemic last year.  It is estimated that 3.7 million unemployed recipients will be affected.  Some states eliminating unemployment benefits are instead offering financial incentives for individuals to find a job.  The Department of Labor’s most recent data reveal that there were over 8 million unfilled job openings at the end of March, the largest number of openings since November 2018.

An increase in travel has spurred higher fuel costs for airlines and automobiles as pent-up demand and the summer months propel prices higher.  The average cost for a gallon of regular gasoline rose over $3 nationally in May, the highest since 2014.  Crude oil prices, which directly affect the price of gasoline, have risen over 80% in the past year.

Sources:  FBI, Federal Reserve, EIA, Dept. of Labor, OneBlueWindow, LLC©