The Preconomist

That can that Quint is crushing is getting more expensive. It has been a busy year so far for aluminum. At the time of this writing (4/21/24), aluminum is up 12.6% month-over-month (m-m) and 20.25% in the last three months. What happened? Last weekend, the US and UK announced a ban on Russian metals affecting aluminum, copper, and nickel. This ban follows suit with the G7’s campaign to curb Russian revenues from crude and petroleum exports. Previous sanctions on Russian metal producers had been in place, but not the blanket bans that now exist. Imports of Russian aluminum had already fallen to zero from tariffs in place in the past. US Treasury officials claim the ban will not have any impact on the pricing of aluminum given the global stockpiles that exist. So we are okay, right? We’ll see about that. While Russian only produces about 6% of global aluminum, 91% of the London Metal Exchange’s (LME) stockpile is Russian aluminum. Any aluminum documented as being traded bef...

Last week most economists had forecasted 200,000 jobs to be added. Instead, the Bureau of Labor Statistics exceeded expectations and announced that 303,000 jobs had been added in March. This morning the Consumer Price Index (CPI-U) turned to those employment numbers and said “here, hold my beer, because no good story ever started with a salad.” Inflation, as measured by the CPI-U was expected to increase 0.3% month-over-month (m-m) after increasing 0.4% m-m in February. Instead, we again saw a 0.4% increase that drove the year-over-year increase up from 3.2% in February to 3.5% in March, heading the wrong way in the Fed’s fight to curb inflation down to 2%. If you exclude food and energy, inflation was 3.8% y-y. This marks three straight months of inflation figures coming in hotter than expected. Earlier this year the Fed had signaled that multiple interest rate cuts were likely since numbers were moving in the right direction. After the employment report and the inflation number...

Recapping a couple of highlights from the past week – Employment and Copper. Employment On Friday the Bureau of Labor Statistics (BLS) released the March Employment Situation with a couple of key takeaways: Nonfarm payroll employment added 303,000 jobs in March (versus the adjusted February total of 270,000). Construction added 39,000 jobs, nearly double the average monthly increase of 19,000 over the last year. Unemployment dipped to 3.8% from 3.9% officially (yet when you take the numbers out another decimal place the decline in nominal – 3.86% in February to 3.83% in March). Average hourly earnings for the private sector marked a 4.23% increase year-over-year (y-y). Average hours worked moved up by 0.1 hours worked per week. After 39 straight months of adding jobs to the workforce the unemployment rate has held steady for the last two years. The BLS Job Openings and Labor Turnover (JOLTS) data shows that openings, hires, and separations also held steady of late despite opening...