Rocket Fuel Newsletter – 04/08/2024

It’s April, and for Detroiters, that means it’s finally time to host the NFL Draft! Organizers are expecting over 300,000 attendees leading up to and through the event, which will take place from April 25 – 27. Don’t miss out on all the festivities!

In this edition: Powell’s latest, an event that won’t be seen in the United States again until 2044 and a recap of the last month of economic news.

Fuel Up! 🚀

Powell Says Rate Cuts Are ‘Likely’ Appropriate This Year

In a speech at the Stanford School of Business, Jerome Powell stated that if the economy evolves as they expect, it will be appropriate to lower rates at some point this year. He noted that inflation is coming down, but that the Fed has time to let incoming data guide their decision making and that additional confidence is needed with regard to inflation coming down before any rate cuts.

Jobless Claims Increase More Than Expected

New claims for unemployment benefits increased by 9,000 and hit a 2-month high of 221,000 for the week of March 30. The expectation from economists was for the report to come in around 214,000, but it is important to note that Easter and the holiday week could have played a factor. In total, the labor market remains strong and has been a key contributor to the economy's health.

Solar Eclipse Leads To Surge In Airbnb Bookings

The total solar eclipse that is crossing North America has received a lot of fanfare; this rare event where the moon passes between the sun and earth last happened in the United States in 2017 and won’t happen again here until 2044.

With people looking to catch a glimpse of the eclipse, bookings for Airbnb rentals along the direct path have skyrocketed. Airbnb and whoever makes the solar eclipse safety glasses seem to be big winners of the celestial spectacle.

Hey Fawaz! 👋 Now that Q1 is over, what are your thoughts on 2024!?

So far this year, the Federal Reserve has stayed true to their word that they will not cut the federal funds rate until we see substantial evidence that inflation is moving toward the golden threshold of 2%. While the economy has remained strong, it is taking longer than some had anticipated for inflation – and subsequently rates – to drop.

So, what are some key indicators to keep an eye on while we wait?

First and foremost, inflation. Inflation has been the major sticking point preventing any rate cuts. The Fed has historically used the Personal Consumption Expenditures (PCE) as their preferred measure of inflation, which is a measure of consumer spending – tracking what households are spending money on and how much they are spending.

The most recent PCE report came in at the end of March and showed that the February PCE was up 2.5% year-over-year.

Gross domestic product (GDP) is another indicator that has recently demonstrated the strength of our current economy. The most recent GDP report showed GDP increased 3.4% over the last year.

Another report to keep an eye on will be the Employment Situation Summary released this past Friday, April 5 (not yet published as of the writing of this article, but will be available on the Bureau of Labor Statistics website). Economists are expecting to see a gain of 200,000 jobs, as well as the unemployment rate potentially reaching 4% for the first time in more than 2 years.

Federal Reserve Chair Jerome Powell spoke last week on April 3 about the Fed’s interpretation of the current economic situation and what it means for potential rate cuts. “The recent data do not, however, materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path.” He went on to say that “most FOMC participants see it as likely to be appropriate to begin lowering the policy rate at some point this year.” In other words, we are making progress, but we are not there yet.

Rate cuts seem to be not a matter of “if” but “when.”

Did we get you? Bravo to everyone who completed our April Fools puzzle last week – Mark W Smith’s time of 14 seconds was the best time of the week on a puzzle where 10% of solvers finished in less than 30 seconds and over 50% finished in less than 2 minutes.

This week’s puzzle gets 2 Rockets out of 5.

Click here to solve!