Labor – there have been various nationwide union strikes recently including Starbucks, Autoworkers, Longshoremen and just now Boeing who announced 17,000 layoffs after the 33,000 Union machinists were on strike since Sept. 14. One term that was discussed in the Longshoremen strike was the Taft-Hartley Act and that the president should invoke the act. This is an act from 1947 that clawed back some rights and privileges that had been given to unions and organized labor 10 years earlier. After the Wagner act, which enshrined union rights and freedoms for workers over 4M American workers had participated in strike action and GDP fell to negative 11% while inflation was up a whopping 14%. In response to this a bi-partisan bill was created named Taft-Hartley that which allowed collective bargaining but limited striking when it negatively impacted the nation. The bill was vetoed by Truman, but there was enough bipartisan support to overrule the veto and grant employers more powers. While this Act doesn’t allow the President to force workers to immediately return to work it does allow the for an appointed board to stop a strike in Federal court and invoke an 80-day cooling off period when strikes occur in ‘vital sectors’ that impact the greater economy and could have serious ripple effects on inflation. Since its inception the Taft-Hartley act has been invoked 37 times with mix results as it delays a strike and doesn’t necessarily stop it – which is why President Biden (a big union supporter) has said he doesn’t think it works.
Mortgage Rates have increased nearly a full 1% since their lows in September as the price of Mortgaged Backed Securities has continued to decline.
Inflation – the Producer Price Index (PPI) Report – which measures wholesale inflation was unchanged in September at 0% increase. Year over year the index is up 1.8%. The core rate, which strips out food an energy rose 0.2% last month and is up 2.8% year over year – an increase from last months’ reading of 2.4%. While these numbers are slightly higher than anticipated remember that these numbers are down from previous double-digit readings.
The September Consumer Price Index showed that overall inflation rose 0.2% in September but is down from 2.5% to 2.4% year over year. The Core rate, which strips oud food and energy, increased by 0.31% and increased from 3.2% to 3.3% Transporation items drove cost increases – Auto insurance increased 1.2% last month up 16.3% year over year. Airline Fares climbed 3.2% and auto repair rose 1%. Shelter cost increased 4.85% year over year which is finally a deceleration as last month costs were up 5.2% year over year.
Mortgage Applications – to purchase homes remained flat last week and are up 8%-year over year. Refinances declined 9% with the rate bumps but remain up 159% year over year. Refinances make up 52% of applications.