Link to full report and disclosures: Real-Time Insights, Economic and Financial Pulse

 

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Real-Time Insights

Highlights

 

 

 

 

 

 

 

· New daily COVID-19 cases are spreading at an accelerating rate ahead of the peak U.S. holiday season. The seven-day average of daily cases has increased to 115k - comparable to the levels during the delta variant wave of infections one year ago. Current case counts are likely underreported due to the increased prevalence of home testing. Despite the increase in cases, data thus far suggest pent-up demand for services and experiences such as travel and dining out remains strong.

· Visits to retail and recreation locations ticked down in the U.S., UK, and Germany but have returned close to pre-pandemic levels across all three countries. High frequency data do not yet reflect a decided increase in visits associated with the upcoming summer holiday season. 

· National average gas prices climbed to a record high $4.6/gallon on May 19. Prices are likely to remain elevated reflecting disruptions to production and distribution of refined petroleum products from Russia - a major exporter, domestic refining capacity constraints, and depleted inventories, particularly on the East Coast.

· Domestic oil and gas producers are slowly but surely making needed investments in expanding production, adding a further 14 rigs in the week ending May 20. The total domestic rig count now stands at 728 and has increased 24% ytd. Further investment across the oil patch should support business fixed investment through 2022.

· Median wage growth has broadened across the income distribution, but remains particularly elevated among lower income quartiles according to FRB Atlanta's Wage Growth Tracker. The 12-month moving average of yr/yr median wage growth among the lowest income quartile increased to 6.4% in April.

· Drewry's world container freight rate index continues to retrace its pandemic surge although the rate of decline slowed last week, with the index falling just 0.1% compared to a 0.9% drop in the previous week. Spot shipping rates remain well above pre-pandemic levels and empirical research suggests rising shipping costs tend to impact inflation with relatively long lags.

Week ahead: New Home Sales (May 24); Durable Goods Orders, MBA Mortgage Applications, FOMC May Meeting Minutes (May 25); Q1 GDP 2nd Estimate, Pending Home Sales (May 26); Personal Income and Consumption (May 27)

 

Link to full report and disclosures: Real-Time Insights, Economic and Financial Pulse

 

Mickey Levy, mickey.levy@berenberg-us.com

 

Mahmoud Abu Ghzalah, mahmoud.abughzalah@berenberg-us.com

 

© 2022 Berenberg Capital Markets, LLC, Member FINRA and SPIC

 

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