The economic reopening of the U.S. economy hit its stride in the second quarter of 2021.   First quarter GDP came in at 6.4%, jobless claims and unemployment trended down, while job openings moved sharply higher.  The capital markets remain in caretaker mode with investors laser-focused, not on earnings, but the Federal Reserve (the "FED") and its intentions regarding any change in policy.  The pandemic continues to remain a serious health issue, and deep political divides remain on everything from the need for continued economic assistance, vaccinations and masks, to the potential seriousness of new variants of COVID-19.  Globally, vaccine access and hence vaccination rates are well behind those in the U.S. which could signal continued supply chain disruptions for much longer than anticipated.  Inflationary pressures seem to be both accelerating and broadening, yet like clockwork, the FED'S balance sheet, now over $8 trillion, and governmental deficits, continue to run at out-sized levels with more spending being proposed. 

The year-over-year Consumer Price Index (CPI) came in at 5.4% for June, which is the highest level in over a decade.  Yet given the much larger percentage increase in energy, many raw materials, housing and transportation costs, much larger numbers may be in store.  As producers face rising material and labor costs, some have resorted to reducing the size of their offering (shrinkflation) in an effort to mask price increases to the consumer.

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