Lumber prices are soaring. While this means the lumber market sees gains, price increases, especially related to labor, will ripple through the economy. While some effects will be transitory, labor costs tend to remain high after they rise.
One forward-looking economic report is from the Census Bureau on new orders for durable goods. It indicates possible stock market growth.
Disagreement is the reason the stock market exists. In general terms, buyers and sellers disagree with each other. While the entire business of Wall Street depends on this disagreement, right now, there seems to be universal agreement on an important fact: stocks are overvalued. But, as Citi analysts point out, other factors, more important ones, are bullish.
One of the important, decades-long debates in the U.S. has been about inequality. Some economists and politicians argue that wages aren’t high enough, believing that’s an indication that businesses have too much leverage in the economy. Fortunately, there’s a tool to measure how insecure workers feel: quit rate. And quit rates suggest that higher wages are coming as the post-pandemic economy returns to normalcy.
We know inflation will rise this summer. The Federal Reserve is telling us that will happen. This is important because actual inflation affects future inflation expectations, and that will determine how consumers respond. If consumers panic when inflation jumps, inflation could be locked-in for the next year.
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