The economy remains short of the supply of goods while consumption surges.

The important employment data for May was released last Friday. Nonfarm payroll growth was double the growth reported for April but below consensus forecasts. The 559,000 increase in jobs in the corporate survey was low enough to keep the Fed on course to maintain current accommodative monetary policy. The drop in the unemployment rate calculated using the household survey was not enough to cause the Fed to believe we have reached a “normal” level of economic activity. The one number that was of a concern was the increase in average hourly earnings. They were reported as having increased by 0.5%, well above the consensus forecast of 0.2%.