Week of Feb 21, 2025 Weekly Recap & The Week Ahead
Thursday, February 27th, 2025There will not be any posting for the week of Feb 21st, 2025 — we are away for some needed R&R
The week ahead — Economic data from Econoday.com:
Posted in Week of Feb 15, 2025 Weekly Recap & The Week Ahead
Tuesday, February 18th, 2025“It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong” — George Soros
1. Inflation Heated Up in January, Freezing the Fed — the Labor Department reported that prices rose last month 0.5% from December on a seasonally adjusted basis. That was the largest monthly increase since August 2023 and well ahead of economists’ expectations for a milder increase of 0.3%. Inflation was a significant factor in the November election. Many Americans were fed up with higher prices and thought that putting a new party in power would help. During his campaign, President Trump vowed that he would lower prices. The bigger-than-expected increase in prices last month largely reflected higher prices for used cars and auto insurance, said Omair Sharif, founder of research firm Inflation Insights. Core prices, which strip out volatile food and energy prices, rose 0.4% from December on a seasonally adjusted basis, the largest increase in nearly two years. Core inflation was 3.3% over the year.
2. Wholesale Inflation Sped Up in January With 0.4% Monthly Gain in PPI — the producer price index increased by 0.4% in January, the Bureau of Labor Statistics said on Thursday morning. That was above economists’ 0.2% consensus estimate and compares with a revised increase of 0.5% in December. The PPI was 3.4% higher than a year earlier, versus a 3.5% rise in the year through December. The core PPI, which excludes food and energy prices, ticked up 0.3% in January, matching expectations and down from an updated 0.4% rise in December. The subindex was up 3.6% from a year earlier.
The January wholesale inflation data confirm a hot start to the year on the inflation front, following Wednesday morning’s consumer price index release. BLS data showed a 0.5% rise in the CPI last month, versus the 0.3% forecast. The core CPI added 0.4%, a tenth more than expected. Those were increases of 3% and 3.3%, respectively, from a year earlier.
3. DOGE Staffer Arrives at Internal Revenue Service Headquarters — Gavin Kliger, an aide to Elon Musk in his effort to overhaul spending across the federal government, visited the District of Columbia offices to examine IRS systems, the people said. Kliger has been working at the Office of Personnel Management, the government human-resources operation that has been heavily involved in Musk’s work to reduce the size of the government. Kliger has asked for meetings with senior officials and was interested in the agency’s head count, according to an IRS employee. The IRS has about 100,000 workers after a recent expansion. It is in the middle of the busiest portion of its year in preparation for the mid-April individual income tax filing deadline.
4. US Retail Sales Drop by Most in Two Years Amid Fires, Storms — US retail sales slumped in January by the most in nearly two years, indicating an abrupt pullback by consumers after a spending spree in the closing months of 2024. The value of retail purchases, not adjusted for inflation, decreased 0.9% after an upwardly revised 0.7% gain in December, Commerce Department data showed Friday. Excluding autos, sales dropped 0.4%.
Nine of the report’s 13 categories posted decreases, most notably motor vehicles, sporting goods and furniture stores. The data encompassed a period marked by devastating wildfires in Los Angeles — the second-largest metropolitan area in the US — and severe winter weather in other parts of the country, which could have depressed brick-and-mortar shopping activity.
The week ahead — Economic data from Econoday.com:
Posted in Week of Feb 8, 2025 Weekly Recap & The Week Ahead
Wednesday, February 12th, 20251. Mideast Powers Reject Trump Proposal to Take Over Gaza — Saudi Arabia, which the U.S. hopes to lead into a deal to normalize ties with Israel, said Wednesday it rejected any efforts to displace Palestinians from their land and reaffirmed support for a Palestinian state. It called its position nonnegotiable and said it wouldn’t establish diplomatic relations with Israel unless that goal was met. Egypt, Jordan, the United Arab Emirates, Qatar and Palestinian leaders in recent weeks have also rejected the idea of relocating Palestinians from the Gaza Strip. In addition to raising moral objections, they have pointed to the security risks and instability that could come with moving a population with armed elements into countries already grappling with their own issues.
2. US Initial Jobless Claims Pick Up, Still Near Pre-Covid Levels — New claims increased by 11,000 to 219,000 in the week ended Feb. 1. The median forecast in a Bloomberg survey of economists called for 213,000 applications. The level of initial claims remain generally in line with pre-Covid levels, and private employment data from ADP Research showed a healthy pace of hiring in January. That’s consistent with a labor market that Federal Reserve Chair Jerome Powell described last week as “pretty stable.”
The four-week moving average of new applications, a metric that helps smooth out fluctuations, ticked up to 216,750, only the highest in a month.
3. US Consumer Sentiment Drops to Seven-Month Low on Price Worries — US consumer sentiment slumped in early February to a seven-month low on a spike in short-term inflation expectations related to concerns about tariffs. Consumers expect prices to rise at an annual rate of 4.3% over the next year, up a full percentage point from the prior month, the data released Friday showed. And they saw costs rising at an annual rate of 3.3% over the next five to 10 years, up slightly from the previous month. Sentiment among Republicans declined for the first time since August, and it continued to deteriorate for Democrats to the lowest since 2020. Confidence also dropped among political independents.
4. US Job Growth Slowed in January After 2024 Ended on Strong Note — Nonfarm payrolls moderated last month, unemployment fell, and annual government revisions now show job gains were softer but still solid in 2024, according to a Bureau of Labor Statistics report out Friday. Separate data from the University of Michigan showed consumers expect prices to rise much faster in the year ahead as President Donald Trump pushes forward with tariffs. Payrolls increased by 143,000 last month after upward revisions to the prior two months, according to BLS. Other revisions only carried out once a year weren’t as severe as once thought — job gains averaged 166,000 a month last year, a slowdown from the initially reported 186,000 pace. Job growth in January was largely fueled by health care, retail trade and government. Employment fell in mining, quarrying and oil and gas extraction, as well as temporary help services and auto manufacturing.
The week ahead — Economic data from Econoday.com:
Posted in Week of Jan 31, 2025 Weekly Recap & The Week Ahead
Wednesday, February 5th, 2025“It wasn’t raining when Noah built the ark.” — Howard Ruff
1. U.S. Home Prices Gained Further Toward End of 2024 — the S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the country, rose 3.8% on year in November 2024, up from 3.6% in October 2024, a monthly indicator reported. The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the November data are based on purchase decisions made earlier in 2024. New York again reported the highest annual gain among the 20 cities surveyed, with a 7.3% increase in November, followed by Chicago and Washington, D.C., with annual increases of 6.2% and 5.9% respectively, S&P said.
Tampa, Fla., posted the lowest return, falling 0.4%, the first annual drop for any market in more than a year in once-hot Florida, Luke noted.
2. Fed Stands Pat on Rates, Entering New Wait-and-See Phase — The decision on Wednesday to leave the benchmark federal-funds rate at its current range around 4.3% followed three consecutive rate cuts beginning in September, when the rate stood around 5.3%. With interest rates now “significantly less restrictive” than they were before last year’s cuts, “we do not need to be in a hurry to adjust our policy stance,” said Fed Chair Jerome Powell at a news conference after the meeting. After Powell spoke, President Trump slammed the Fed and its leader for allowing inflation to accelerate four years ago and promised to put a lid on price increases. “I will do it by unleashing American Energy, slashing Regulation, rebalancing International Trade, and reigniting American manufacturing,” he said in a post on his social-media site.
3. U.S. GDP Grew 2.5% in 2024, but Slowed Slightly in Final Quarter — U.S. gross domestic product—the value of all goods and services produced across the economy—grew 2.5% last year, the Commerce Department said Thursday. That was slower than 3.2% in 2023 but still a sturdy pace. The year-over-year GDP growth reflects the fourth-quarter change from a year earlier. Economists surveyed by The Wall Street Journal and the Federal Reserve use that metric for forecasts. The Fed expects the economy to grow 2.1% this year and 1.8% in the longer run. The economy is entering an uncertain 2025. Economists tend to believe that the Trump administration’s proposals on tariffs and deportations will hurt growth and stoke inflation. Trump advisers have said that plans to cut regulation and boost energy production will offset the effects of higher goods prices.
4. PCE Inflation Accelerated in December — The personal-consumption-expenditures price index rose by 0.3% last month, compared with 0.1% in November, contributing to a 2.6% increase over all of 2024. Excluding volatile food and energy prices, the core version of the PCE price index rose by 0.2% last month, compared with 0.1% in November, and by 2.8% over the past 12 months. December was the third straight month that core PCE inflation stalled at 2.8%. After peaking above 5.6% in 2022, core PCE inflation fell to 2.6% last June but then reaccelerated. The Fed wants to see PCE inflation fall back to its 2% target, but in December, officials projected that still might take until 2027. Slower progress on inflation led the Fed to hold interest rates steady this week, breaking a string of rate cuts that had begun in September.
The week ahead — Economic data from Econoday.com:
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