{"id":6345,"date":"2022-12-06T14:02:09","date_gmt":"2022-12-06T20:02:09","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=6345"},"modified":"2022-12-06T16:25:38","modified_gmt":"2022-12-06T22:25:38","slug":"market-commentary-december-6-2022","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/market-commentary-december-6-2022","title":{"rendered":"Market Commentary | December 6, 2022"},"content":{"rendered":"\n
What will it take to slow this economy down?<\/p>\n\n\n\n
In 2001, railway workers slowed a runaway train in Ohio by latching a second engine to the back of the locomotive and applying the brakes. In all, the train traveled sixty-six miles over two hours, decelerating from a maximum speed of 47 miles per hour to 10 miles per hour before workers regained control of it, according to CNN.<\/p>\n\n\n\n
Throughout 2022, the United States Federal Reserve has been trying to slow inflation by putting the brakes on the U.S. economy. So far, the Fed has raised rates six times, but the economy continues to grow apace. Last week, the Bureau of Economic Analysis reported the economy grew faster than originally thought from July through September 2022. Gross domestic product (GDP), which is the value of all goods and services produced by the U.S., was up 2.9 percent, annualized, rather than 2.6 percent as the advance estimate indicated.<\/p>\n\n\n\n
Last week\u2019s unemployment report also suggested the economy remains strong. More jobs were added than economists expected, and the unemployment rate remained at 3.7 percent. Average hourly earnings also increased faster than expected, up 5.1 percent over the last 12 months.<\/p>\n\n\n\n
Megan Cassella of Barron\u2019s reported, \u201cThe biggest outstanding obstacle to the Federal Reserve\u2019s success in reining in inflation boils down to a numbers problem: There aren\u2019t enough workers in the [United States]. Simply put, labor supply and demand need to come back into balance to contain wage growth and services inflation, which continues to climb\u2026A combination of factors is contributing to the dearth of workers, from Baby Boomer retirements and falling immigration to a low birth rate and long COVID. Together, they suggest that shortages are here to stay.\u201d<\/p>\n\n\n\n
Last week, stock and bond markets rallied following Fed Chair Jerome Powell\u2019s mid-week speech, in which he confirmed it was likely December\u2019s rate increase would be smaller than the last few increases have been. Later in the week, the strong employment report checked investors\u2019 enthusiasm. Regardless, major U.S. indices finished higher, reported Nicholas Jasinski of Barron\u2019s, and Treasury yields finished the week mostly lower.<\/p>\n\n\n\n