Business Conditions

“Services-sector expansion likely slowed in February as shortages of labor and materials continue. Fewer new cases of Covid may provide some relief but turmoil as a result of the Russian invasion of Ukraine has the potential to disrupt the global economy and businesses.” ~ Robert Hughes

“Weekly initial claims ticked down for a second week. Overall, claims remain at a very low level and the labor market remains very tight. However, the Russian invasion of Ukraine dramatically increases uncertainty.” ~ Robert Hughes

“Light-vehicle sales slowed in February as component shortages continue to restrain production. Assemblies, inventory, and prices continued to show signs of stabilization through January, albeit at extreme levels.” ~ Robert Hughes

“Manufacturing-sector demand remained strong in February. Production increased despite ongoing labor and logistical issues but constraints on faster production growth continue. Recent events in Ukraine may be yet another source of disruption and further delay the return to normalcy.” ~ Robert Hughes

“Consumer expectations weakened again in February, pulling down overall consumer confidence. Continued expansion remains the likely course, but weaker consumer attitudes could become a headwind.” ~ Robert Hughes

“Housing permits were solid again in January. However, rising home prices and higher mortgage rates may be headwinds for demand while elevated commodity costs remain a challenge for homebuilder profits.” ~ Robert Hughes

“Weekly initial claims for unemployment benefits ticked up and are slightly above the pre-pandemic level. Overall, claims remain at a very low level by historical comparison. Most data suggest the labor market remains very tight.” ~ Robert Hughes

“Industrial output jumped in January, led by a weather-related surge in utility output. Modest gains across many other areas puts about 95 percent of industrial producers at or above pre-pandemic levels. While declining Omicron cases should reduce constraints on output, overall labor shortages remain a significant obstacle.” ~ Robert Hughes

“Retail sales rebounded in January and remain at a high level. However, some of the strong gains are likely due to price increases, making real gains less robust.” ~ Robert Hughes

“Consumer sentiment fell again in early February and is now below the lows seen in four of the last six recessions. Consumers are concerned about rising prices, government policies, and long-term economic prospects.” ~ Robert Hughes