1. 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:

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