By: Bryce Coward, Wealth Management Advisor & Director of Investments
Over the last week, various business and consumer survey data may be pointing to something we haven’t seen in quite a while: rising inflation and slowing growth as of the most recent releases. For example, on the consumer side, the University of Michigan consumer confidence survey, and Conference Board survey both showed declining sentiment and higher inflation expectations. On the business side, the Philadelphia Fed Dallas Fed surveys pointed to falling growth/business conditions and rising prices paid.
We believe there are multiple factors at play. First off, CPI inflation as reported by the BLS bottomed last October and has been in a rising trend since. Already rising inflation readings coupled with policies that may be inflationary, could be driving inflation expectations in survey data to accelerate further.
Slowing growth survey data is tougher to explain. Overall, with a low unemployment rate and no breakout higher in unemployment claims, it appears that the labor market – a key driver of overall economic growth – remains strong. Business surveys tend to be leading economic indicators and in most cases lead the direction of GDP prints. However, they are also more volatile. We’ll be keeping our eye on these and leading growth indicators to help us determine if this is a blip in the radar or the start of a trend.
From an investment, our philosophy of holding what we believe to be high quality equities, diversification at the security and asset class level, and risk management remain paramount to our process. For long-term investors, bumps in the road may prove to be opportunities.
Approved with the following disclaimer. Advisory services offered through Meridian Wealth Management, LLC, a Registered Investment Advisor. Readers are encouraged to conduct their own research and consult with a qualified financial professional before making any investment decisions.
