By: Michael Sullivan, CFA
The March employment report showed the fourth straight drop in the unemployment rate; at 8.8%, it’s the lowest rate in two years. The consumer confidence index fell sharply in last month, influenced in part by inflation fears and rising oil prices.
First, let’s recap news from the past week:
The U.S. economy added 216,000 jobs in the month of March, exceeding the market’s forecast of 200,000. In addition, the U.S. unemployment rate fell for the fourth straight month. At 8.8%, this is the lowest U.S. unemployment rate in two years.
After five straight monthly increases, the consumer confidence index fell sharply in March to 63.4, from 72.0 in February. Inflation expectations over the next year, which is a key component of the confidence report, jumped to their highest level since July 2008.
One item causing fears of inflation is the price of oil. A barrel of oil rose $2.54 for the week and closed Friday at $107.94, the highest level since Se