Trish Regan’s Market Notes: New Data Shows Labor Shortage, Inflation and More Scary Stuff

It’s getting ugly out there.

Jobless claims dropped to the lowest level since the start of the pandemic, causing concerns over a labor shortage. Investors are concerned that the labor shortage could contribute to galloping inflation. After all, there are 8.1 million jobs open right now yet, no one seems to want them.

Initial unemployment claims stood at 473,000 in the past week, which is better than the expected 490,000. Weekly jobless claims have nearly halved since the start of 2021, as the job market is recovering.

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However, all is not as well as it looks. While jobless claims are at pandemic lows, the labor force participation rate is still far from recovering to pre-pandemic levels.

That means that fewer Americans are looking for work!

Employees are now worried about a pending labor shortage. Despite more than 8 million job openings in March, many Americans are choosing not to go back to work.

Former restaurant CEO Andy Puzder blamed Joe Biden’s “stupid” economic policy for that fact, unemployment benefits in particular.

Inflation Concerns Mount: PPI At 0.6% – up 6.2% for Year. 

Concerns are mounting that the labor shortage could contribute to inflation, as employers may be forced to raise prices due to higher wages or automation.

Inflation concerns were exacerbated by the fact that the U.S. producer prices increased more than expected. The PPI index for April was reported at 0.6%, while the economists expected 0.3%. Meanwhile, for the last 12 months, it’s shown a gain of 6.2%. At some point, the Fed will need to confront inflation.

Market Opens, Stocks Rebound

But, investors don’t seem worried about that YET.

The spike in PPI did not deter investors, who flocked to the stocks again. The U.S. stocks rebounded at the open, following the tech-lead plunge due to the worse than expected CPI increase.

Dow Jones was up 0.9%, S&P gained 0.8%, and Nasdaq was up 0.9%, recovering some of their Wednesday’s losses when the Dow tumbled dropped 2%, S&P 500 2.2%, and Nasdaq 2.7%.

Apple stock rallied 2.4% in morning trading, back above the 200-day moving average.

Tesla dropped below $600, to the lowest point in two months, to $591. The stock was shaken by Musk’s shocking announcement on Bitcoin. The company still has substantial Bitcoin holdings.

Musk Wrecks Crypto 

In a series of shocking tweets, Elon Musk has announced that Tesla would no longer accept Bitcoin as payment for its vehicles, citing concerns over energy consumption. A single Bitcoin transaction uses more energy than an average U.S. household does in 24 days.

Bitcoin (BTC) fell by over 13%, to $49,705 per coin, as investors priced in the loss of a prominent backer. Ether (ETH) fell by 12% to $3,608 per coin. Litecoin (LITE) plummeted 16% and Ripple (XRP) lost 12%.

Dogecoin was the biggest loser, plummeting by more than 20% to $0.39 per coin. According to Coinbase, the entire crypto market fell by 10%.

Musk’s announcement enraged crypto traders, who counted on him to “pump” the prices. Billionaire and crypto investor Mark Cuban rebuked Musk’s claims, stating that Bitcoin is still more energy-efficient than traditional banking and gold.

 

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