Skip to main content
Northwestern Mutual Northwestern Mutual
Primary Navigation
  • Home
  • About Us
    • About Us Overview
    • Working With an Advisor
    • Our Financial Strength
    • Sustainability and Impact
  • Financial Planning
    • Financial Planning Overview
    • Retirement Planning
      • Retirement Planning Overview
      • Retirement Calculator Beach chair icon
    • College Savings Plans
    • Private Wealth Management
    • Estate Planning
    • Long-Term Care
    • Business Services
  • Insurance
    • Insurance Overview
    • Life Insurance
      • Life Insurance Overview
      • Whole Life Insurance
      • Universal Life Insurance
      • Variable Universal Life Insurance
      • Term Life Insurance
      • Life Insurance Calculator Shield icon
    • Disability Insurance
      • Disability Insurance Overview
      • Disability Insurance  For Individuals
      • Disability Insurance  For Doctors and Dentists
      • Disability Insurance Calculator Money Parachute icon
    • Long-Term Care
    • Income Annuities
  • Investments
    • Investments Overview
    • Brokerage Accounts & Services
    • Private Wealth Management
    • Investment Advisory Services
    • Fixed & Variable Annuities
    • Market Commentary
  • Life & Money
    • Life & Money Overview
    • Educational Resources About Financial Planning
    • Educational Resources About Investing
    • Educational Resources About Insurance
    • Educational Resources About Everyday Money
    • Educational Resources About Family & Work
    • Market Commentary
    • Podcast
Utility Navigation
  • Find a Financial Advisor
  • Claims
  • Life & Money
  • Market Commentary
  • Weekly Market Commentary

Markets Welcome Tamer Inflation, Bipartisan Infrastructure Bill


  • Brent Schutte, CFA®
  • Aug 16, 2021
Business owner looking at shipment after reading Northwestern Mutual Market Commentary
Northwestern Mutual Market Commentary for August 16, 2021 Photo credit: Alistair Berg
share Share on Facebook Share on X Share on LinkedIn Share via Email

Markets breathed a mild sigh of relief amid a generally positive week of developments. Consumer prices, one of the most closely watched metrics over the past several months, rose at a more modest rate than expected, which helped cool some fears about the Fed acting soon to tamp out inflation.

The Senate, in bipartisan fashion, passed a $1.2 trillion infrastructure package. The potential flood of funding stands to further benefit cyclical sectors of the economy, which were already experiencing potent demand tailwinds. While the bill now heads to the House, smart infrastructure spending could create jobs and boost U.S. productivity in the years ahead (which can also help keep price increases moderate over a longer period). Of course, attention will likely shift to how it’s all paid for, in addition to the $3.5 trillion budget framework that’s also up for debate and could be linked with passage of the infrastructure bill.

Still, concerns about the trajectory of COVID-19 here and abroad, hiring difficulties and supply bottlenecks are sticking around for now. Here’s a look at the week that was and the week ahead.

WALL STREET WRAP

Inflation Loses Some Steam: While prices rose again in July, the pace notably decelerated from the month prior, and that was a welcome report last week in a market increasingly concerned about rising prices. The Labor Department reported Wednesday that its consumer price index rose 5.4 percent in July from a year earlier and 0.5 percent month-over-month. Core inflation, which removes more volatile food and energy components, rose 4.3 percent year-over-year, down from 4.5 percent the month prior. Month-over-month inflation rose to just 0.3 percent in July compared to 0.9 percent in June.

Used car and truck prices, an outsize contributor to headline inflation over the past two months, moderated significantly in July, rising just 0.2 percent compared to June’s 10.5 percent jump. Fed Chairman Jerome Powell has said throughout the summer that he views the current bout with inflation as transitory, and it shouldn’t compel the Fed to significantly alter policy before the labor market fully heals.

Producer Prices Rise: The producer price index, which measures prices producers receive for their output, rose 7.8 percent year-over-year in July, the fastest annual pace on record. Month-over-month, price increases in July matched June’s tally of 1 percent.

A rise in COVID-19 restrictions in Asia could put further pressure on prices. Several countries have reimplemented some restrictions, including temporary factory closures in Thailand, Malaysia and Vietnam. Congestion has risen in China's top two container ports following the shutdown of a terminal after a COVID-19 case was detected last week, for example. All of this could add another wrench into already gummed-up international supply chains.

Job Openings Hit a Record: The number of job openings in the U.S. reached 10.1 million, the U.S. Bureau of Labor Statistics reported Monday. That’s a record for the data series and outnumbers the total unemployed population by well over 1 million.

Employers, particularly in the hardest-hit services sector of the economy, are having difficulties filling open jobs amid a flood of demand for travel, dining and entertainment. Enhanced unemployment benefits (which are set to expire next month), health concerns, childcare and the types of jobs available are all contributing factors. As a result, many employers are sweetening their offers by raising wages, offering sign-on bonuses and flexible working conditions to fill positions.

Hiring Challenges Persist on Main Street: Small business optimism fell 2.8 points in July to 99.7, according to results from the NFIB Small Business Optimism Index. Two factors that have challenged owners, supply chain disruptions and finding qualified workers, are sticking around. Forty-nine percent of owners said they have openings that cannot be filled, which is a 48-year record for the index. A net 12 percent of owners say current inventory levels were “too low” in July, which is also a 48-year record high reading. All together, that’s put downward pressure on small business owners’ optimism for conditions going forward.

“Ultimately, owners could sell more if they could acquire more supplies and inventories from their supply chains,” said NFIB Chief Economist Bill Dunkelberg.

THE WEEK AHEAD:

Services Spending on the Rise? July retail sales, due Tuesday, should show a continued shift in consumer spend from goods to services. Consumers are still sitting on healthy savings, which is fueling demand. However, we’ll see if rising prices, issues with inventories and the COVID-19 resurgence are impacting the things we buy.

Corporate Earnings Roundup: The Q2 corporate earnings season largely draws to a close this week, and we’ll pull together some final takeaways from an all-around strong raft of earnings reports. NM’s investment team will pull together a few callouts and look ahead to the next quarter.

Housing, Industrial Production and More: We’ll also get another raft of housing data this week, from builder sentiment to housing starts. Industrial production, capacity utilization and business inventories will also be worth a look this week, as they are both indicators of future growth.

Commentary is written to give you an overview of recent market and economic conditions, but it is only our opinion at a point in time and shouldn’t be used as a source to make investment decisions or to try to predict future market performance. To learn more, click here.

There are a number of risks with investing in the market; if you want to learn more about them and other investment-related terminology and disclosures, click here.

Social Security is an important part of your financial plan.

Your financial advisor can show you how Social Security will work to reinforce your retirement savings. And they’ll show you how it can help you live the life you want in retirement.

Let's get started
Brent Schutte, Northwestern Mutual Wealth Management Company Chief Investment Officer
Brent Schutte, CFA® Chief Investment Officer

As the chief investment officer at Northwestern Mutual Wealth Management Company, I guide the investment philosophy for individual retail investors. In my more than 30 years of investment experience, I have navigated investors through booms and busts, from the tech bubble of the late 1990s to the financial crisis of 2008-2009. An innate sense of investigative curiosity coupled with a healthy dose of natural skepticism help guide my ability to maintain a steady hand in the short term while also preserving a focus on long-term investment plans and financial goals.

Left Dotted Pattern
Right Dotted Pattern

Want more? Get financial tips, tools, and more with our monthly newsletter.

Related Articles

article
Businesswoman reading Northwestern Mutual Marketing Commentary

Inflationary Pressures Likely to Wane in Months Ahead

Learn more
article
Man reading Northwestern Mutual market commentary

Markets Power Higher as Q3 Earnings Ramp Up

Learn more
article
Couple sitting on porch reading Northwestern Mutual Market Commentary

Inflation Surges, But There’s More to The Story

Learn more

Find What You're Looking for at Northwestern Mutual

Northwestern Mutual General Disclaimer

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries. Life and disability insurance, annuities, and life insurance with longterm care benefits are issued by The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM). Longterm care insurance is issued by Northwestern Long Term Care Insurance Company, Milwaukee, WI, (NLTC) a subsidiary of NM. Investment brokerage services are offered through Northwestern Mutual Investment Services, LLC (NMIS) a subsidiary of NM, brokerdealer, registered investment advisor, and member FINRA and SIPC. Investment advisory and trust services are offered through Northwestern Mutual Wealth Management Company (NMWMC), Milwaukee, WI, a subsidiary of NM and a federal savings bank. Products and services referenced are offered and sold only by appropriately appointed and licensed entities and financial advisors and professionals. Not all products and services are available in all states. Not all Northwestern Mutual representatives are advisors. Only those representatives with Advisor in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.

Northwestern Mutual Northwestern Mutual

Footer Navigation

  • About Us
  • Newsroom
  • Careers
  • Information Protection
  • Business Services
  • Podcast
  • Contact Us
  • FAQs
  • Legal Notice
  • Sitemap
  • Privacy Notices

Connect with us

  • Facebook iconConnect with us on Facebook
  • X iconFollow Northwestern Mutual on X
  • LinkedIn iconVisit Northwestern Mutual on LinkedIn
  • Instagram iconFollow Northwestern Mutual on Instagram
  • YouTube iconConnect with Northwestern Mutual on YouTube

Over 8,000+ Financial Advisors and Professionals Nationwide*

Find an Advisor

Footer Copyright

*Based on Northwestern Mutual internal data, not applicable exclusively to disability insurance products.

Copyright © 2025 The Northwestern Mutual Life Insurance Company, Milwaukee, WI. All Rights Reserved. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries.