US Economics Weekly: Inflation Week Up Next

UBS reports that labor's share of income hit record lows in 2026Q1 due to weak bargaining power. The focus now shifts to 'inflation week,' where April CPI is expected to show a significant jump driven by gasoline and rents.

Key Takeaways

• 1.Labor's share of US national income fell to an all-time low in 2026Q1, reflecting a persistent lack of wage bargaining power for workers.
• 2.The upcoming 'inflation week' is expected to show headline CPI rising 0.59% in April, driven by energy prices and a rebound in housing rents.
• 3.The April employment report showed 115K new jobs, suggesting a resilient but slackening labor market with an unrounded unemployment rate of 4.34%.

Table of Contents

• Economic Comment: why is labor's share of income so low?
• The Week Ahead: inflation week
• The Week in Review: a decent April report
• Economic Comment: labor lagging
• A structural break in bargaining power?
• Bargaining power today
• Labor market indicators: back to the 40s
• Tax tracking: running just ahead of expectations
• Week in Review: a decent April report
• Fed Speak: Fed officials weigh in on the balance of risks
• April Emp Sit: likely to fuel the hawkish tone
• CIT issues ruling on Section 122 tariffs, stops short of universal injunction
• The President gives the EU more time to ratify the tariff deal from last summer
• University of Michigan longer-run inflation expectations fall to 3.4% in May
• FRBNY inflation expectations little changed in April
• Trade details: boost from energy exports, broadening in cap goods imports
• Oil inventories fall, production stable, exports remain elevated
• Oil rig count still trending sideways despite oil price surge
• Railcar loadings suggest some substitution with higher fuel costs
• Lending standards little changed in SLOOS despite dereg push
• Construction spending still soft, data centers are a bright spot
• Factory orders rise 1.5% in March, core orders revised even higher
• Light weight vehicle sales edge back in April
• ISM services composite declines on new orders
• Labor productivity in nonfarm sector up 0.8% (saar) in Q1, 2.9% over the year
• Job openings fall in March, hiring rate bounces back
• New home sales up 99K over February and March
• MBA mortgage applications slip, mortgage rates rise
• Job cut announcements at 74K in April
• ADP estimates private employment rose 109K in April
• Consumer credit rises in March
• May Treasury refunding — auction sizes unchanged, guidance unchanged
• Initial claims rise to 200K, continuing claims fall further
• Economic Forecast Table
• Week Ahead: inflation week
• Data in the week ahead

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