📊US nonfarm business sector labor productivity growth revised -0.5pt to a marginal +0.3% q/q (annualized) in Q1 2026:
▶️Output +1.0%,
▶️Hours worked +0.7%.
📉Unit labor costs up a moderate 1.8%, as the 2.1% compensation gain was only partially offset by productivity growth
📉Panic, Productivity or Pretext?
Many AI-related layoff announcements feel less like a technology shock and more like a narrative shift: cost cutting framed as innovation, layoffs framed as productivity.
Welcome to a supply-driven world.
👀"Squeezing more life out of every dollar before deciding to spend it"
"Higher-income households remained resilient and less sensitive to price increase, while middle-income households were described as "squeezing more life out of every dollar before deciding to spend it"...
🇺🇸Fed Beige Book
📊Slight to moderate activity
🛒Consumer spending mixed & "bifurcated" with income squeeze
🏭Little to no change in employment
💲Wage growth modest/moderate
🔥Inflation moderate to strong: Middle East shock
😬Biz outlook little changed
EY-Parthenon Chief Economist @GregDaco joins @sam_vadas to discuss the economic backdrop, market growth themes, and the state of the consumer and spending.
For more market news, tune in at: https://t.co/trngMLWoJ8
Our World Cup projections are ready!
100,000 simulations of every stage of the tournament.
We hope you'll appreciate the level of detail. Here are our baseline ratings for each team.
Spoiler: USA/CAN/MEX are not in the top tier but get a boost from home-field advantage.
Kevin Warsh set to revamp Federal Reserve’s signaling to Wall Street
"Several former top officials said that they expected Warsh...to begin rolling back the central bank’s “forward guidance” on interest rates as soon as the mid-June FOMC meeting"
https://t.co/P4QDToRgmw
US proposes new #tariffs of +10% on imports from 60 trading partners, following Section 301 investigation into how trade partners handle goods allegedly produced by forced labor
10%: Can, Mex, EU, UK, Taiwan...
12.5%: Chn, Ind, Jap, S. Korea, Braz...
https://t.co/xyYXwcaV8z
Bernanke reflects on the Powell Fed at a Brookings event offering early retrospectives
On the wins:
-“A terrific job defending the Federal Reserve during a very, very difficult time” for Powell personally and for the institution.
-Building up political capital with extensive outreach to lawmakers
-Noting his pride in introducing press conferences, he says Powell “made them less wonky and more democratic, and more effective. That was a very important contribution.”
-Powell made the Fed “more accessible” through skilled communications
On the flubs:
-He compares the Powell Fed’s mistake in describing inflation as “transitory” to his own misjudgment labeling subprime as “contained” and suggests following up such forecasts with “if” statements; ie, we think X, but if we are wrong, we are prepared to do Y.
-He says the main real-time critiques of the transitory inflation call were right for the wrong reasons. They didn’t get the diagnosis of what drove the inflation right and that is important for calibrating the proper response to the error.
Miscellaneous:
On the size of the balance sheet and the argument for reducing the Fed’s footprint in the market: “That’s a meaningless statement.”
🇺🇸April #JOLTS: Openings rise to near-2-year high on surge in professional & business services openings, but hiring still soft
⬆️Job openings: 7.6mn (+731k)
🔻Hiring: 5.1mn (-419k) remains very low
🔻Quits: 3.0mn (-183k) remain very low
⬇️Layoffs low but uptrend: 1.7mn (-192k)
The manufacturing paradox: activity would appear to be strengthening but 25% of the comments from purchasing managers were positive versus 69% negative...
✅Strength mainly in computers/electronics, aerospace & electrical equipment & appliances
#Fed Governor #Powell:
"If any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well... The Fed's credibility would be lost... we have a duty to safeguard that priceless asset"
https://t.co/A4zPw9yXZk
🏆Déjà vu! A Chief Economist's World Cup Forecast
👇My @FIFAWorldCup model using a goal-probability framework calibrated on attacking quality, defensive strength, recent form, squad, players & market-implied expectations (+ my own take: Spain wins!)
https://t.co/2QQb8jt6c3
"Real disposable income (aka the money in our pocket after taxes & inflation) fell 1.1% y/y in April while consumer spending is up 2.1% y/y"
@GregDaco
⛔️Cause for concern
🔻Real disposable income (aka the money in our pocket after taxes & inflation) fell 1.1% y/y in April while consumer spending is up 2.1% y/y
🐖More & more are dipping into savings, using credit & leveraging wealth
⚖️Uneven & fragile picture