Good Tuesday AM from your Hometown Lender,

First of three big hits this week is in the books.

PPI came in very tame at .1%. The components were a little more complicated as Food and Energy were up more than expected but the Trade component fell off a cliff. With the backward revisions lower (which is also helping), PPI is now at 2.2% annualized. Markets are happy with that, but just as they did not get too excited last month on the monster .6 report (now revised down), they are not too excited about this .1 report. Today is a set up for tomorrow’s CPI report. That will carry far more weight. For now, the 10-yr is back to 3.87% and mortgage bonds are catching a little bit of a bid. Tomorrow is a big day.

As I typically share, it is not a great idea to float into big news days.

Dr. Elliott Eisenberg more so than many economists, has a way of sharing important insights. His latest muse:

“The labor market is meaningfully weakening. A year ago, the Y-o-Y increase in the labor force was 3 million and net employment gains were 2.9 million. 97% of job entrants found a job. Now the labor force is 1.3 million larger than it was Y-o-Y, but employment gains have been a paltry 57,000, meaning 4% of entrants have found employment. Unsurprisingly, the unemployment rate has jumped from 3.5% to 4.3%.” My kids, who are very well educated, are finding this out for themselves.

Stay safe and make today great!