The overall risk of the economy remains relatively moderate as treasury spreads remain historically narrow and the CFNAI 3-month average sits below zero.  However, highlighting this week’s report were a better than expected increase in jobs and a lower than expected decrease in durable goods orders.

Comments on this week’s report:

  • After the 10-year minus 3-month treasury spread inverted last week, spreads widened this week with the 10-year minus 2-year increasing to 0.18% and the 10-year minus 3-month increasing to 0.07%. Despite the increase in the spreads, the treasury yield curve still remains relatively flat.
  • The U.S. added 196,000 jobs in March yet its year-over-year growth only increased from 1.70% to 1.71%. Meanwhile the unemployment rate holds steady at 3.80%. Both indicate a low level of risk.
  • Wage growth, as measured by average hourly earnings, recognized a drop in its year-over-year growth rate as it decreases from 3.48% to 3.33%. However, wage growth still indicates a low level of risk.
  • Durable goods orders dropped 1.6% in February and reduced its year-over-year growth from 8.13% to 1.81%. Despite the relatively large drop in durable goods orders year-over-year rate, the index tends to be somewhat volatile and still indicates a low level of risk.
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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