b'EconomicsBeyond Headlines: What to DO With the Latest Economic NewsB etween the war, inflation, the stock market, etc., economic news headlines have been overwhelming lately. Lets break down recent movements and how they should inform your business decisions.The Stock MarketThrough April, the S&P 500 declined 13.3%, erasing roughly a years worth of gains. On a monthly basis, the 1/12 rate-of-change was negative for the first time in two years. Generally speaking, defensive and inflation-oriented investments are outperforming other sectors, such as technology. While near-term volatility is likely, peer cases suggest gains are probable one year out. Energy PricesRussias invasion of Ukraine is impacting the normal supply-demand fundamentals of global energy markets, resulting in elevated prices. The US has banned oilgrowth in housing construction, although growth will slow imports from Russia, and the European Union, whichinto early next year. Those in the construction market is more dependent on Russian sources. The EU hasshould prepare to increase capacity, keeping in mind imposed a partial Ban: https://www.csis.org/analysis/ regional trends.european-union-imposes-partial-ban-russian-oil. The US is experiencing higher oil prices, but due to domesticInflationproduction the increases are not as drastic as in Europe.April was a significant month for inflation. Producer inflation US Crude Oil Prices remained between roughly $95 andreached a 47-year high of 15.7%. Consumer inflation $115 per barrel in April and early May. More drastically,ticked down but was still elevated at 8.3%.the March-to-April rise of 34.7% in US Natural Gas PricesOn the consumer side, major contributors to these record is nearly double the previous record rise for this timelevels were nondiscretionary categories such as food and period. Natural gas may be currently subject to greaterhousing. Consumers may become more price conscious as pricing pressure due to exports of LNG to Europe. Planthey feel the pinch of inflation and as the economy moves for elevated energy and transport costs until the supplyalong the back side of the business cycle. Passing along limitations are resolvedlook to improve efficiencies toprice increase may become more difficult, so make sure help mitigate these costs. If you have exposure to theyou are communicating your competitive advantages and O&G market, be prepared for rising domestic activitycarefully managing your brand. If you are in discretionary but keep in mind that production is still constrained bymarkets, you may notice a more pronounced slowdown.investors willingness to finance expansion.Mortgage Rates For producers, the war in Ukraine has exacerbated many Mortgage rates remain relatively low compared to priorpreexisting global supply chain issues, contributing to decades but are rising rapidly. Rates were at a record-lowhigher US Producer Prices by way of elevated commodity 2.65% in early January 2021 and were generally belowand freight costs.3% throughout 2021. Since the start of this year, ratesOverall, we expect prices for both consumers and have jumped up, surpassing 5% during April. The Federalproducers to generally rise through at least 2024, but Reserve Boards recent increases to the federal fundswe anticipate inflation will begin easing by late this year. rate, as well as anticipated future increases, signal thatFocus on maintaining your margins through efficiency rise in mortgage rates is likely to persist. The financialgains. Although interest rates are rising, it still may be status of US consumers suggests they are able to handleworth it to borrow to invest in capacity and efficiency higher rates. However, if rates continue to climb rapidly,improvementsbut be sure to do a thorough ROI analysis, it will pose a downside risk to the housing market. and factor forecasts for your end markets into that.Despite rising mortgage rates, housing vacancy ratesThis article is provided by ITR Economics in conjunction remain near record lows while housing costs are stillwith MRCA.rising, suggesting homeowners will likely continue to purchase homes. The majority of evidence points to www.mrca.orgMidwest Roofer 15'