What should we make of the news that manufacturing production fell outright in June—just—but that the Empire State manufacturing index has rocketed to a record high?

Our June payroll forecast is 1,050K, based largely on the Homebase small business employment data, which were dead right in May and pretty close in April.

We have to talk about Covid again, unfortunately. The downward trend in U.S. cases appears to be over, for now, following a 94% drop from the January peak. 

The astonishing 0.9% leap in the April core CPI won't be replicated in the core PCE deflator.

The April retail sales and industrial production numbers today are wild cards, with the former especially hard to predict after the stimulus-fuelled surge in spending in March.

It was easy for inflation doves to dismiss the 0.34% jump in the March core CPI as merely a correction, after three straight small increases, averaging just 0.06%.

The Council of Economic Advisors waded into the post-Covid inflation debate last week—actually, it would be more accurate to say that they dipped a tentative toe into the water—with a blog post arguing that "the likeliest outlook over the next several months is for inflation to rise modestly... and to fade back to a lower pace thereafter as actual inflation begins to run more in line with longer- run expectations.

Today's March CPI report will be the first to be hit by hugely adverse base effects on the anniversary of the Covid-induced collapse in prices for a broad range of services. 

We had planned to lead this Monitor with our take on
the idea that supply constraints are depressing housing market activity, but then we looked at the February personal income report, and changed our mind.