Tag: business

The Markets (as of market close February 17, 2023)

Investors spent much of last week contemplating the impact of the latest inflation data and favorable economic reports. Consumer prices, producer prices, and export prices rose in January, while retail sales also increased, all of which could prompt more interest-rate hikes from the Federal Reserve. In addition, crude oil prices fell more than 4.0% last week as supplies are plentiful, and rising interest rates could stymie economic growth and slow demand for oil. Stocks ended last week mixed, with the Dow and the S&P 500 slipping lower, while the Russell 2000, the Nasdaq, and the Global Dow edged higher. Ten-year Treasury yields rose by 8.0 basis points. The dollar increased against a basket of currencies, while gold prices fell 1.25%.

Last week began on a high note, as stocks finished higher ahead of the upcoming inflation data. Investors also may have sought some bargains following the previous week’s lackluster results. In any case, each of the benchmark indexes listed here posted solid gains, led by the Nasdaq, which rose 1.5%. The Russell 2000 gained 1.2%, followed by the S&P 500 and the Dow at 1.1%, while the Global Dow added 0.7%. Ten-year Treasury yields dipped to 3.71%. Crude oil prices slid 0.6% to $79.26 per barrel. The dollar and gold prices also ended the day lower.

Investors weren’t sure what to make of the latest Consumer Price Index (see below), sending stocks on a topsy turvy ride for most of the day last Tuesday, ultimately closing with mixed results. The Dow (-0.5%) and the Russell 2000 (-0.1%) ended lower, the S&P 500 broke even, while the Nasdaq (0.6%) and the Global Dow (0.2%) finished the day higher. Ten-year Treasury yields climbed higher, reaching 3.76%. Crude oil prices fell for the second straight day, ending at about $79.11 per barrel. The dollar dipped, while gold prices advanced marginally.

A strong retail sales report (see below) helped drive stocks higher last Wednesday. Among the benchmark indexes listed here, the Russell 2000 led the advance, gaining 1.0%, followed by the Nasdaq (0.9%), the S&P 500 (0.3%), and the Dow (0.1%). The Global Dow was flat on the day. Ten-year Treasury yields continued to climb higher, adding 4.8 basis points to close at 3.80%. The dollar rose 0.6%, while gold prices slid nearly 1.0%. Crude oil prices dipped $0.41 to close at about $78.65 per barrel.

Stocks suffered their worst performance in a month last Thursday following a “hot” Producer Price Index (see below), which fueled worries of more interest-rate hikes. The Nasdaq (-1.8%), the S&P 500 (-1.4%), the Dow (-1.3%), and the Russell 2000 (-1.0%) fell by at least 1.0%, while the Global Dow slid 0.2%. Ten-year Treasury yields climbed to 3.84%. The dollar and gold prices advanced. Crude oil prices continued to tumble, falling $0.53 to $78.06 per barrel.

The Dow (0.4%) and the Russell 2000 (0.2%) eked out gains last Friday, while the Nasdaq (-0.6%), the S&P 500 (-0.3%), and the Global Dow (-0.1%) declined. The yield on 10-year Treasuries slipped 1.5 basis points to close the day and the week at 3.82%. Crude oil prices dropped 2.75% to about $76.28 per barrel. The dollar and gold prices moved marginally higher.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 2/17	Weekly Change	YTD Change
DJIA	33,147.25	33,869.27	33,826.69	-0.13%	2.05%
Nasdaq	10,466.48	11,718.12	11,787.27	0.59%	12.62%
S&P 500	3,839.50	4,090.46	4,079.09	-0.28%	6.24%
Russell 2000	1,761.25	1,918.81	1,946.36	1.44%	10.51%
Global Dow	3,702.71	3,959.77	3,978.16	0.46%	7.44%
Fed. Funds target rate	4.25%-4.50%	4.50%-4.75%	4.50%-4.75%	0 bps	25 bps
10-year Treasuries	3.87%	3.74%	3.82%	8 bps	-5 bps
US Dollar-DXY	103.48	103.58	103.89	0.30%	0.40%
Crude Oil-CL=F	$80.41	$79.83	$76.28	-4.45%	-5.14%
Gold-GC=F	$1,829.70	$1,875.20	$1,851.80	-1.25%	1.21%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The Consumer Price Index rose 0.5% in January after increasing 0.1% in December. Despite the January jump, prices actually declined for the 12 months ended in January, falling 0.1 percentage point to 6.4%. This was the smallest 12-month increase since the period ended October 2021. Housing costs drove inflation higher last month, with shelter prices advancing 0.7%, accounting for nearly half of the overall CPI increase. Prices for food rose 0.5%, while energy prices rebounded, climbing 2.0%. Core prices, less food and energy, rose 0.4% last month and 5.6% for the last 12 months ended in January, the smallest 12-month increase since December 2021. This report, coupled with last month’s robust jobs data, will likely support more interest-rate increases by the Federal Reserve.
• Prices producers received for goods and services were higher than expected in January. The Producer Price Index increased 0.7% last month after falling 0.2% in December. The January increase was the highest since June 2022. The PPI rose 6.0% for the 12 months ended in January. Last month, prices for goods increased 1.2%, while prices for services rose 0.4%. In January, food prices fell 1.0% but are up 11.6% over the last 12 months. Energy prices rebounded from a December swoon (-6.7%), increasing 5.0% in January. Producer prices, less foods, energy, and trade services, rose 0.6% in January, the largest advance since March 2022.
• Retail sales increased 3.0% in January after decreasing 1.1% in December. Retail sales advanced 6.4% from January 2022. Retail trade sales advanced 2.3% last month and 3.9% for the 12 months ended in January. Helping to drive retail sales in January was a 6.4% increase in sales of automobiles and other motor vehicles. Department store sales jumped 17.5% last month, food services and drinking places sales rose 7.2%, while internet sales climbed 1.3%.
• Import prices fell 0.2% in January, following a 0.1% (revised) decline in December. In contrast, export prices rose 0.8% last month after falling 3.2% in December. Despite the recent declines, import prices advanced 0.8% over the past year. The 12-month increase in January was the smallest over-the-year rise since import prices fell 0.3% from December 2019 to December 2020. Import fuel prices dropped 4.9% in January, while nonfuel import prices increased 0.3%. The January increase in export prices was the first monthly advance since June 2022. Agricultural export prices fell 0.2% last month, while nonagricultural export prices increased 0.8%.
• The number of residential building permits issued in January rose 0.1% over December’s total but were 27.3% below the January 2022 rate. Single-family residential building permits issued in January slid 1.8% from the previous month. Last month, housing starts fell 4.5% from the December total and 21.4% under the January 2022 figure. Single-family housing starts in January were 4.3% under the December total. Housing completions rose 1.0% in January from the December rate and 12.8% above the January 2022 figure. Single-family housing completions in January were 4.4% over the December total.
• Industrial production was unchanged in January after falling 0.6% and 1.0% in November and December, respectively. In January, manufacturing output moved up 1.0% and mining output rose 2.0%, following two months with substantial decreases for each sector. Utilities were a drag on industrial production, falling 9.9% in January as unseasonably warm weather in January depressed the demand for heating. Total industrial production in January was 0.8% above its pace from a year earlier.
• Average regular retail gas prices slid lower for the second consecutive week, according to the U.S. Energy Information Administration. The national average retail price for regular gasoline was $3.390 per gallon on February 12, $0.054 per gallon less than the prior week’s price and $0.097 less than a year ago. Also, as of February 13, the East Coast price decreased $0.067 to $3.339 per gallon; the Gulf Coast price dipped $0.074 to $3.018 per gallon; the Midwest price fell $0.061 to $3.236 per gallon; the West Coast price decreased $0.001 to $4.106 per gallon; and the Rocky Mountain price increased $0.071 to $3.765 per gallon. Residential heating oil prices averaged $4.390 per gallon on February 13, $0.073 below the previous week’s price but $0.434 per gallon more than a year ago.
• For the week ended February 11, there were 194,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level, which was revised down by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended February 4 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended February 4 was 1,696,000, an increase of 16,000 from the previous week’s level, which was revised down by 8,000. States and territories with the highest insured unemployment rates for the week ended January 28 were New Jersey (2.6%), Rhode Island (2.5%), California (2.3%), Minnesota (2.3%), Alaska (2.2%), Massachusetts (2.2%), Montana (2.1%), Illinois (2.0%), Puerto Rico (2.0%), Connecticut (1.9%), and New York (1.9%). The largest increases in initial claims for unemployment insurance for the week ended February 4 were in California (+6,820), Ohio (+3,528), Illinois (+1,533), Kansas (+611), and Florida (+568), while the largest decreases were in Georgia (-1,463), New Jersey (-1,291), Texas (-859), Oregon (-692), and Arkansas (-632).

Eye on the Week Ahead

The second estimate of the fourth-quarter gross domestic product is available this week. The initial estimate, based on incomplete data, showed that the economy expanded at a rate of 2.9%. The January figures on sales of new and existing homes are also out this week. Existing home sales plunged 34.0% in 2022, while sales of new, single-family homes fell 26.6%. The report on personal income and outlays for January is released at the end of this week. Consumer spending slipped in December, while prices for goods and services decreased 0.2%, an indication of waning inflationary pressures. Based on the CPI and PPI, it is expected that the personal consumption expenditures price index will show an increase in January.

The Markets (as of market close February 10, 2023)

Stocks dipped lower last week as investors mulled the direction of the economy as the Federal Reserve continued to increase interest rates, bolstered by January’s strong labor report. With fourth-quarter corporate earnings reporting season nearing a close, fewer companies are topping profit expectations, which may be another indication of a slowing economy. Each of the benchmark indexes posted weekly losses, with the S&P 500 turning in its worst weekly performance of the year. The yield on 10-year Treasuries rose 21.0 basis points as bond prices declined. Crude oil prices jumped late last week following Russia’s announcement that it plans to cut oil production by about 5.0% next month in retaliation against Western oil sanctions. The dollar inched higher, while gold prices slipped lower.

Stocks opened last week lower as investors awaited the Federal Reserve’s next move. January’s surging jobs report certainly supported the Fed’s aggressive policy to bring down inflation and could lead to a longer period of interest-rate hikes. By the close of trading last Monday, the Russell 2000 (-1.4%), the Global Dow (-1.0%), and the Nasdaq (-1.0%) led the declining benchmark indexes, followed by the S&P 500 (-0.6%) and the Dow (-0.1%). Ten-year Treasury yields shot up 10.2 basis points to 3.63%. Crude oil prices rose for the first time in several sessions, adding $1.07 to reach $74.46 per barrel. The dollar and gold prices also advanced on the day.

Wall Street saw stocks rebound last Tuesday after Federal Reserve Chair Jerome Powell said that the process of getting inflation down (disinflation) had begun, although it has a long way to go. Investors expected the Federal Reserve to take a hawkish stance on the heels of the latest robust jobs report. By the end of the trading session, each of the benchmark indexes posted solid gains, with the Nasdaq reversing course from the previous day after gaining 1.9%. The S&P 500 added 1.3%, followed by the Dow and the Russell 2000 (0.8%) and the Global Dow (0.7%). Bond prices continued to fall, with the yield on 10-year Treasuries adding 4.0 basis points to 3.67%. Crude oil prices increased for the second straight day, climbing to $77.31 per barrel. The dollar slipped lower, while gold prices rose marginally higher.

Stocks were unable to maintain the previous day’s rally, as each of the benchmark indexes listed here lost value last Wednesday. The volatile Nasdaq declined 1.7%, the Russell 2000 dropped 1.5%, the S&P 500 slid 1.1%, the Dow fell 0.6%, and the Global Dow decreased 0.2%. Ten-year Treasury yields closed at 3.65% after falling 2.1 basis points. Crude oil prices continued to rally, increasing 1.6% to reach $78.40 per barrel. The dollar and gold prices advanced.

Last Thursday saw stocks fall for the second straight session amid mixed corporate earnings data. The Russell 2000 (-1.3%) and the Nasdaq (-1.0%) led the declining benchmark indexes, followed by the S&P 500 (-0.9%), the Dow (-0.7%), and the Global Dow (-0.2%). Ten-year Treasury yields added 3.0 basis points to close at 3.68%. Crude oil ended a modest rally, falling 1.1% to $77.62 per barrel. The dollar and gold prices slid lower.

Stocks ended the week mixed last Friday, with the Nasdaq and the Global Dow trending lower, while the Dow, the S&P 500, and the Russell 2000 advanced. Ten-year Treasury yields rose 6.1 basis points to 3.74%. Crude oil prices advanced $1.74 to $79.83 per barrel. the dollar advanced, while gold prices slid lower.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 2/10	Weekly Change	YTD Change
DJIA	33,147.25	33,926.01	33,869.27	-0.17%	2.18%
Nasdaq	10,466.48	12,006.96	11,718.12	-2.41%	11.96%
S&P 500	3,839.50	4,136.48	4,090.46	-1.11%	6.54%
Russell 2000	1,761.25	1,985.53	1,918.81	-3.36%	8.95%
Global Dow	3,702.71	3,990.44	3,959.77	-0.77%	6.94%
Fed. Funds target rate	4.25%-4.50%	4.50%-4.75%	4.50%-4.75%	0 bps	25 bps
10-year Treasuries	3.87%	3.53%	3.74%	21 bps	-13 bps
US Dollar-DXY	103.48	102.96	103.58	0.60%	0.10%
Crude Oil-CL=F	$80.41	$73.24	$79.83	9.00%	-0.72%
Gold-GC=F	$1,829.70	$1,878.90	$1,875.20	-0.20%	2.49%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The monthly report on the international trade in goods and services deficit, released February 7, is for December and shows that the goods and services trade deficit was $67.4 billion, up $6.4 billion from the November trade deficit. December exports were $250.2 billion, $2.2 billion less than November exports. December imports were $317.6 billion, $4.2 billion more than November imports. For 2022, the goods and services trade deficit increased $103.0 billion, or 12.2%, from 2021. Exports increased $453.1 billion, or 17.7%. Imports increased $556.1 billion, or 16.3%.
• The Treasury budget deficit was $38.8 billion in January, down from December’s $85.0 billion, but well above the January 2022 surplus of $118.7 billion. Through the first four months of fiscal year 2023, the deficit sits at $460.2 billion, $201.2 billion higher than the deficit over the same period last fiscal year.
• Average regular retail gas prices slid lower last week, according to the U.S. Energy Information Administration. The national average retail price for regular gasoline was $3.444 per gallon on February 6, $0.045 per gallon less than the prior week’s price and unchanged from a year ago. Also, as of February 6, the East Coast price decreased $0.060 to $3.406 per gallon; the Gulf Coast price dipped $0.041 to $3.092 per gallon; the Midwest price fell $0.085 to $3.297 per gallon; the West Coast price increased $0.022 to $4.107 per gallon; and the Rocky Mountain price advanced $0.150 to $3.694 per gallon. Residential heating oil prices averaged $4.465 per gallon on February 6, $0.192 below the previous week’s price but $0.547 per gallon more than a year ago.
• For the week ended February 4, there were 196,000 new claims for unemployment insurance, an increase of 13,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 28 was 1.2%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended January 28 was 1,688,000, an increase of 38,000 from the previous week’s level, which was revised down by 5,000. States and territories with the highest insured unemployment rates for the week ended January 21 were New Jersey (2.6%), Rhode Island (2.4%), California (2.3%), Alaska (2.2%), Minnesota (2.2%), Massachusetts (2.1%), Puerto Rico (2.0%), Montana (2.0%), Illinois (1.9%), and New York (1.9%). The largest increases in initial claims for unemployment insurance for the week ended January 28 were in Georgia (+2,070), New York (+949), New Jersey (+847), Oregon (+801), and Wisconsin (+569), while the largest decreases were in Kentucky (-3,402), California (-2,551), Ohio (-1,105), Arkansas (-568), and Michigan (-359).

Eye on the Week Ahead

The latest inflation data is available this week with the release of the consumer price index, the producer price index, and the report on import and export prices. Inflationary pressures appear to have peaked. This latest information could show prices beginning to slide, which reinforces the effectiveness of the Fed’s aggressive interest-rate hike policy.

The Markets (as of market close February 3, 2023)

Just when investors saw a glimmer of hope that the Fed would soften its rate-hike policy, the January labor figures came out showing a massive job increase coupled with moderated wage growth. The latest employment data is evidence of a labor market that has withstood the Fed’s actions thus far and could encourage a more aggressive response by the central bank as it attempts to drive down inflation. Despite a late-week slide, stocks ended the week mixed, with the Nasdaq, the Russell 2000, and the S&P 500 posting gains, while the Dow, and the Global Dow lost ground. Ten-year Treasury yields inched higher and the dollar advanced. Gold prices, which had been on an upswing, fell to under $1,900.00 per ounce. Doubts about increased demand from China and concerns about rising interest rates sent crude oil prices lower last week.

Investors turned cautious last Monday ahead of the Federal Reserve’s meeting and a slew of big-tech earnings reports. The Nasdaq suffered its worst day since December 22, falling 2.0%, while the S&P 500 lost 1.3%, marking its worst daily performance since mid-January. Declines in a couple of mega-cap tech stocks dragged both indexes lower. The remaining benchmark indexes listed here didn’t fare much better. The Russell 2000 slid 1.4%, while the Global Dow and the Dow dipped 0.8%. Ten-year Treasury yields added 3.3 basis points to reach 3.55%. Crude oil declined nearly $2.00 to $77.78 per barrel. The dollar advanced against a basket of currencies. Gold prices fell 0.4% to $1,938.70 per ounce.

Stocks closed January on an uptick, with each of the benchmark indexes listed here posting solid gains. The Russell 2000 jumped 2.5% by the close of trading, followed by the Nasdaq (1.7%), the S&P 500 (1.5%), the Dow (1.1%), and the Global Dow (0.4%). Treasury yields on 10-year notes slipped 2.2 basis points to close at 3.52%. Crude oil prices rose 1.6%, reaching $79.12 per barrel. The dollar fell, while gold prices advanced.

Last Wednesday saw stocks climb higher after the Federal Reserve scaled back its interest-rate hikes (see below) and indicated that inflation may be slowing. The Nasdaq jumped 2.0%, well ahead of the other benchmark indexes listed here. The Russell 2000 gained 1.5%, the S&P 500 advanced 1.1%, the Global Dow added 0.9%, and the Dow ended the day flat. Bond prices climbed higher, with the yield on 10-year Treasuries falling 13.2 basis points to 3.39%. Crude oil prices slid 2.5%, landing at $76.94 per barrel. The dollar declined, while gold prices increased 1.2% to $1,967.70 per ounce.

Stocks continued to rally last Thursday, as investors clung to hopes that the Fed is on track to loosen its fiscal tightening policy. Both the Nasdaq and the S&P 500 have enjoyed the best three-session rally since November. The Nasdaq gained 3.3%, the Russell 2000 climbed 2.1%, the S&P 500 advanced 1.5%, and the Global Dow increased 0.3%. Only the Dow failed to advance, dipping 0.1%. Ten-year Treasury yields were flat by the end of Thursday’s session. Crude oil prices fell for the second straight day, declining to $76.00 per barrel. The dollar rose, while gold prices fell nearly 1.0%.

A robust jobs report sent stocks reeling last Friday, with each of the benchmark indexes listed here closing the session in the red. The Nasdaq lost 1.6%, followed by the S&P 500 and the Global Dow, which fell 1.0%. The Russell 2000 declined 0.9% and the Dow dipped 0.4%. Ten-year Treasury yields added 13.6 basis points to hit 3.53%. Crude oil prices continued to slip, falling to $73.24 per barrel. The dollar rose 1.2%, while gold prices slid 2.7%.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 2/3	Weekly Change	YTD Change
DJIA	33,147.25	33,978.08	33,926.01	-0.15%	2.35%
Nasdaq	10,466.48	11,621.71	12,006.96	3.31%	14.72%
S&P 500	3,839.50	4,070.56	4,136.48	1.62%	7.73%
Russell 2000	1,761.25	1,911.46	1,985.53	3.88%	12.73%
Global Dow	3,702.71	4,004.70	3,990.44	-0.36%	7.77%
Fed. Funds target rate	4.25%-4.50%	4.25%-4.50%	4.50%-4.75%	25 bps	25 bps
10-year Treasuries	3.87%	3.51%	3.53%	2 bps	-34 bps
US Dollar-DXY	103.48	101.92	102.96	1.02%	-0.50%
Crude Oil-CL=F	$80.41	$79.46	$73.24	-7.83%	-8.92%
Gold-GC=F	$1,829.70	$1,928.20	$1,878.90	-2.56%	2.69%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Following its meeting last week, the Federal Open Market Committee voted to increase the target range for the federal funds rate 25 basis points to 4.50%-4.75%. In support of its decision, the Committee pointed to modest growth in spending and production, robust job gains, and a low unemployment rate, while noting that inflation had eased somewhat but remained elevated. The FOMC anticipates more interest-rate increases in the future until it feels that inflation has returned to the Committee’s goal of 2.0% over time. However, the FOMC indicated that it would continue to assess economic information in determining whether to adjust its current monetary policy. In addition, following its meeting, Federal Reserve Chair Jerome Powell said, “we can now say for the first time that the disinflationary process has started.”
• Employment rose by a whopping 517,000 new jobs in January, according to the latest report from the Bureau of Labor Statistics. January’s job gains exceeded the 2022 average monthly gain of 401,000. Job growth was widespread in January, led by gains in leisure and hospitality, professional and business services, and health care. Employment also increased in government, partially reflecting the return of workers from a strike. Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in January. The unemployment rate has shown little net movement since early 2022. In January, both the labor force participation rate, at 62.4%, and the employment-population ratio, at 60.2%, were unchanged. In January, average hourly earnings rose by $0.10, or 0.3%, to $33.03. Over the past 12 months, average hourly earnings have increased by 4.4%, down from 4.9% for the 12 months ended in December. The average workweek rose by 0.3 hour to 34.7 hours.
• The Job Openings and Labor Turnover Summary for December, released February 1, 2023, revealed that the number of job openings rose to 11.0 million, up from the November total of 10.4 million. The number of job openings in December is the highest monthly total since July. In December, the largest increases in job openings were in accommodation and food services (+409,000), retail trade (+134,000), and construction (+82,000). The number of job openings decreased in information (-107,000). December saw hires increase by 131,000 to 6.2 million, while total separations increased 59,000 to 5.9 million.
• Manufacturing continued to decline in January, according to the latest release of the S&P Global US Manufacturing PMI™. Purchasing manager survey respondents noted a sharp contraction in new orders, while input and output costs increased as price pressures strengthened. Job growth slowed as new orders waned and backlogs declined. Overall, the purchasing managers’ index posted 46.9 in January, marginally higher than the December reading of 46.2.
• The services sector followed manufacturing, falling sharply in January, according to the S&P Global US Services PMI™. Like manufacturing, weak domestic and foreign demand led to declines in new business and new export orders. At the same time, cost inflation picked up for the first time in eight months.
• Regular retail gas prices continued to rise across the country last week, according to the U.S. Energy Information Administration. The national average retail price for regular gasoline was $3.489 per gallon on January 30, $0.074 per gallon above the prior week’s price and $0.121 higher than a year ago. Also, as of January 30, the East Coast price increased $0.082 to $3.466 per gallon; the Gulf Coast price dipped $0.041 to $3.133 per gallon; the Midwest price climbed $0.078 to $3.382 per gallon; the West Coast price increased $0.077 to $4.085 per gallon; and the Rocky Mountain price advanced $0.110 to $3.544 per gallon. Residential heating oil prices averaged $4.657 per gallon on January 30, $0.044 below the previous week’s price but $0.881 per gallon more than a year ago.
• For the week ended January 28, there were 183,000 new claims for unemployment insurance, a decrease of 3,000 from the previous week’s level. This is the lowest number of initial claims since April 2022 and the fifth straight week of declines. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 21 was 1.1%, unchanged from the previous week’s rate, which was revised down by 0.1 percentage point. The advance number of those receiving unemployment insurance benefits during the week ended January 21 was 1,655,000, a decrease of 11,000 from the previous week’s level, which was revised down by 9,000. States and territories with the highest insured unemployment rates for the week ended January 14 were New Jersey (2.5%), Rhode Island (2.4%), Alaska (2.3%), Minnesota (2.2%), California (2.1%), Massachusetts (2.1%), Puerto Rico (2.1%), Montana (2.0%), Illinois (2.0%), and New York (1.9%). The largest increases in initial claims for unemployment insurance for the week ended January 21 were in Arkansas (+419) and the Virgin Islands (+5), while the largest decreases were in California (-175,582), New York (-4,957), Ohio (-4,396), Georgia (-3,921), and Pennsylvania (-2,700).

Eye on the Week Ahead

There isn’t much in terms of economic reports issued this week. The goods and services trade deficit report for December is out this week. The trade deficit narrowed sharply in November, falling $6.3 billion from the previous month. A notable drop in imports led to the lowest monthly trade deficit since July 2020. The Treasury budget rose more than $63.0 billion in December from a year ago. For the first three months of the fiscal year, the deficit sat at $421.4 billion, up from $377.7 billion over the same period in the previous fiscal year.

The Markets (as of market close January 31, 2023)

January proved to be a bumpy ride for investors, with stocks ultimately ending higher to begin the new year, despite concerns that the economy may be headed toward a significant slowdown or even a recession. Nevertheless, each of the benchmark indexes listed here posted solid gains in January, led by the Nasdaq as tech stocks rebounded from a rough 2022. Stocks began the month by climbing higher over the first two weeks of January. However, equities lagged mid-month, only to rebound at the end of January, closing out the month on a positive note.

Several market sectors posted solid gains in January. Consumer discretionary and communication services increased by about 14.0%. Real estate, materials, and information technology gained about 9.0%. On the other hand, health care, utilities, and consumer staples lost ground.

Recent economic data indicated that inflation may have peaked. The consumer price index and the personal consumption expenditures price index for December revealed a drop in the annual rate of price increases. However, the Federal Reserve and most central banks continued to stress further tightening. It is expected the Federal Open Market Committee will hike interest rates 25 basis points following its meeting on February 1. Wall Street remained hopeful that the economy can weather more interest-rate hikes. Fourth-quarter gross domestic product increased 2.9%, a slower pace of growth than in the third quarter. For 2022, GDP increased 2.1%. Several of the world’s leading economic indicators slowed in the second half of 2022, curtailing momentum leading into 2023.

Manufacturing activity decelerated, with industrial production falling over the past several months. Durable goods orders rose in December, driven largely by a jump in transportation. Excluding transportation, durable goods orders decreased 0.1%. The purchasing managers’ index declined as output levels fell amid weak customer demand. High interest rates and economic uncertainty led to reduced customer spending.

Fourth-quarter corporate earnings were generally favorable, however not as strong as the same period last year. Of the roughly 100 S&P companies that have reported Q4 results, total earnings are down about 6.0% compared to a year ago and are expected by be down 7.2% overall.

Bond prices rose in January, pulling yields lower. Ten-year Treasury yields fell 32 basis points. The Treasury yield curve is currently inverted, with the yield on the one-month bond at about 4.53%, while the 10-year bond yield sits at 3.52%. An inverted yield curve is often seen as an indicator of economic weakness. The dollar slid lower against a basket of world currencies. Gold prices rose nearly $114.00 per ounce in January, advancing for the second consecutive month.

Crude oil prices declined in January for the third straight month. Prices for U.S. and global crude oil notched their largest monthly decreases since November 2022. Oil prices were volatile in January, opening the month lower, but rising on optimism of China’s increased demand. However, prices slipped lower toward the end of January as overall demand appeared to wane. The retail price of regular gasoline was $3.489 per gallon on January 30, $0.398 more than December’s price, and $0.121 higher than a year ago.

Stock Market Indexes

Market/Index	2022 Close	Prior Month	As of January 31	Monthly Change	YTD Change
DJIA	33,147.25	33,147.25	34,086.04	2.83%	2.83%
Nasdaq	10,466.48	10,466.48	11,584.55	10.68%	10.68%
S&P 500	3,839.50	3,839.50	4,076.60	6.18%	6.18%
Russell 2000	1,761.25	1,761.25	1,931.94	9.69%	9.69%
Global Dow	3,702.71	3,702.71	3,990.37	7.77%	7.77%
Fed. Funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	3.87%	3.87%	3.52%	-35 bps	-35 bps
US Dollar-DXY	103.48	103.48	102.08	-1.35%	-1.35%
Crude Oil-CL=F	$80.41	$80.41	$79.08	-1.65%	-1.65%
Gold-GC=F	$1,829.70	$1,829.70	$1,944.00	6.25%	6.25%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.

Latest Economic Reports

• Employment: Job growth remained strong in December with the addition of 233,000 new jobs following a net downward revision of 28,000 in the prior two months. Despite federal interest-rate hikes aimed at slowing the economy and inflation, there is little evidence that the supply of labor is peaking. Overall, employment rose by 4.5 million in 2022 (an average monthly gain of 375,000), less than the increase of 6.7 million in 2021 (an average monthly gain of 562,000). In December, notable job gains occurred in leisure and hospitality, health care, construction, and social assistance. The unemployment rate edged down 0.1 percentage point to 3.5%. The number of unemployed persons decreased 278,000 to 5.7 million in December. The employment-population ratio increased by 0.2 percentage point over the month to 60.1%. The labor force participation rate was little changed at 62.3%. Both measures have shown little net change since early 2022. In December, average hourly earnings increased by $0.09, or 0.3%, to $32.82. Over the past 12 months ended in December, average hourly earnings rose by 4.6%. The average workweek decreased by 0.1 hour to 34.3 hours in December, down from 34.4 hours in November.
• There were 186,000 initial claims for unemployment insurance for the week ended January 21, 2023. The total number of workers receiving unemployment insurance was 1,675,000. By comparison, over the same period last year, there were 222,000 initial claims for unemployment insurance, and the total number of claims paid was 1,787,000.
• FOMC/interest rates: The Federal Open Market Committee met on the last two days of January, however the results of that meeting will not be released until the end of the first day of February, after this report has been released. The results of that meeting will be detailed in the next weekly report and in the February monthly report.

• GDP/budget: The economy, as measured by gross domestic product, accelerated at an annual rate of 2.9% in the fourth quarter of 2022, according to the initial, or advance, estimate. GDP increased 3.2% in the third quarter after falling in the first and second quarters, 1.6% and 0.6%, respectively. Consumer spending, as measured by the personal consumption expenditures index, rose 2.1% in the fourth quarter compared to an increase of 2.3% in the third quarter. Spending on services rose 2.6% in the fourth quarter compared with a 3.7% increase in the third quarter. Consumer spending on goods actually increased 1.1% in the fourth quarter after decreasing 0.4% in the third quarter. Fixed investment fell 6.7% in the fourth quarter (-3.5% in the third quarter), pulled lower by a 26.7% drop in residential fixed investment. Nonresidential (business) fixed investment rose 0.7% in the fourth quarter. Exports fell 1.3% in the fourth quarter, compared with a 14.6% increase in the previous quarter. Imports, which are a negative in the calculation of GDP, fell 4.6% in the fourth quarter, following a 7.3% decline in the third quarter. Consumer prices increased 3.2% in the fourth quarter (4.3% in the third quarter). Excluding food and energy, consumer prices advanced 3.9% in the fourth quarter (4.7% in the third quarter). In 2022, GDP increased 2.1%, compared with an increase of 5.9% in 2021. The PCE price index increased 6.2%, compared with an increase of 4.0% in 2021. Excluding food and energy prices, the PCE price index increased 5.0%, compared with an increase of 3.5% in 2021.
• December saw the federal budget deficit come in at $85.0 billion, $163.5 billion less than the November deficit but $62.7 billion above the December 2021 deficit. The deficit for the first three months of fiscal year 2023, at $421.4 billion, is $43.7 billion more than the first three months of the previous fiscal year. In December, government receipts totaled $454.9 billion and $1,025.6 trillion for the current fiscal year. Government outlays were $539.9 billion in December and $1,447.0 trillion through the first three months of fiscal year 2023. By comparison, receipts in December 2021 were $486.7 billion and $1,051.9 trillion through the first three months of the last fiscal year. Expenditures were $508.0 billion in December 2021 and $1,429.6 trillion for the year.

• Inflation/consumer spending: Data from December shows that the peak of rising inflation may be behind us. According to the latest Personal Income and Outlays report, personal income rose 0.2% and disposable personal income rose 0.3% in December after each increased 0.3% in November. Consumer spending fell 0.2% in December after declining 0.1% the previous month. Consumer prices inched up 0.1% in December, the same advance as in November. Excluding food and energy, consumer prices increased 0.3% in December. Consumer prices have risen 5.0% since December 2021, 0.5 percentage point less than the 12-month period ended in November 2021.
• The Consumer Price Index dipped 0.1% in December after inching up 0.1% in November. Over the 12 months ended in December, the CPI rose 6.5%, down from 7.1% in November, falling to its lowest 12-month advance since October 2021. Excluding food and energy prices, the CPI rose 0.3% in December and 5.7% for the year ended in December. Although energy prices fell 4.5% in December, food prices rose 0.3% and prices for shelter increased 0.8%. For the 12 months ended in December, energy prices increased 7.3%, while food prices rose 10.4%.
• Prices that producers receive for goods and services dropped 0.5% in December after rising 0.2% in November. Producer prices increased 6.2% for the 12 months ended in December after rising 10.0% in 2021. In December, the decrease in the PPI index can be attributed to a 1.6% decline in prices for goods. In contrast, prices for services rose 0.1%. Producer prices less foods, energy, and trade services rose 0.1% in December after increasing 0.3% in the previous month. Prices less foods, energy, and trade services advanced 4.6% in 2022, following a 7.0% rise in 2021.
• Housing: Sales of existing homes decreased for the eleventh consecutive month after declining 1.5% in December. Existing home sales dropped 34.0% from December 2021. Limited inventory and rising mortgage rates contributed to the decrease in existing-home sales. The median existing-home price was $366,900 in December, lower than the November price of $372,000 but 2.3% higher than the December 2021 price of $358,800. Unsold inventory of existing homes represents a 2.9-month supply at the current sales pace, down from the November pace of 3.3 months but higher than the 1.7-month supply in December 2021. Sales of existing single-family homes dropped 1.1% in December and 33.5% from December 2021. The median existing single-family home price was $372,700 in December, down from $378,700 in November but higher than the December 2021 price of $365,300.
• New single-family home sales advanced in December, climbing 2.3% and marking the second consecutive monthly increase. However, sales are down 26.6% from December 2021. An estimated 644,000 new homes were sold in 2022, 16.4% below the 2021 figure of 771,000. The median sales price of new single-family houses sold in December was $462,100 ($459,000 in November). The December average sales price was $528,400 ($528,600 in November). The inventory of new single-family homes for sale in December represented a supply of 9.0 months at the current sales pace, down marginally from the November estimate of 9.2 months.

• Manufacturing: Industrial production declined 0.7% in December, following a 0.6% decrease in November. Industrial production has not increased since July 2022. Manufacturing decreased 1.3% in December (-1.1% in November), mining fell 0.9%, while utilities rose 3.8%. Over the 12 months ended in December, total industrial production was 1.6% above its year-earlier reading.
• December saw new orders for durable goods increase 5.6%, after decreasing 1.7% in November. Durable goods orders advanced four out of five months with the December advance. Excluding transportation, new orders increased 0.2% in December. Excluding transportation, new orders decreased 0.1%. Excluding defense, new orders increased 6.3%. Transportation equipment, also up four of the last five months, contributed to the December increase, rising 16.7%. Also of note, new orders for nondefense aircraft and parts jumped 115.5% in December after falling 30.7% the previous month. New orders for nondefense capital goods increased 19.2% in December, while new orders for defense capital goods slid 2.8%.

• Imports and exports: December saw import prices climb 0.4%, the first monthly increase since June 2022. Prices for U.S. imports rose 3.5% over the past year, driven by higher fuel and nonfuel prices. Import fuel prices increased 0.6% in December, the first monthly increase since June 2022. Nonfuel import prices climbed 0.4% in December, the first monthly increase since April 2022. Nonfuel import prices rose 1.9% in 2022, the smallest annual advance since 2020. Export prices declined 0.3% in November and have not recorded a 1-month increase since rising 1.1% in June 2022. Prices for exports fell 2.6% in December after falling 0.4% in November. Export prices have not increased on a monthly basis since a 1.1% advance in June 2022. Exports rose 5.0% over the past 12 months, the smallest over-the-year advance since a 2.5% increase in January 2021.
• The international trade in goods deficit was $90.3 billion in December, up $7.3 billion, or 8.8%, from November. Exports of goods for December were $166.8 billion, $2.6 billion, or 1.6%, less than November exports. Imports of goods were $257.1 billion in December, $4.7 billion, or 1.9%, more than in November. The December drop in exports was largely attributable to a 1.7% decline in consumer goods and a 5.1% decrease in industrial supplies. In December, auto imports were up 9.4%, while imports of consumer goods rose 6.6%.
• The latest information on international trade in goods and services, released January 5, is for November and shows that the goods and services trade deficit was $61.5 billion, a decrease of $16.3 billion (-21.0%) from the October deficit. November exports were $251.9 billion, $5.1 billion, or 2.0%, less than October exports. November imports were $313.4 billion, $21.5 billion, or 6.4%, less than October imports. Year to date, the goods and services deficit increased $120.1 billion, or 15.7%, from the same period in 2021. Exports increased $439.4 billion, or 18.9%. Imports increased $559.5 billion, or 18.1%.
• International markets: China’s zero-COVID policy, in place for much of 2022, slowed that country’s economy, which grew by just 3.0% in 2022, far below the official target. However, the Chinese government’s abrupt end to that policy at the end of 2022 raised hope for 2023. Inflation may have reached its peak, but most central banks aren’t ready to end interest-rate hikes — with the exception of Canada. The Bank of Canada indicated it will likely hold off on any further interest rate increases following the last 25-basis point rate hike, which sent interest rates up to a 15-year high of 4.5%. Conversely, the European Central Bank has maintained that inflation remains too high and will continue to raise interest rates. Eurozone inflation reached 9.2% in December 2022. Manufacturing has slowed in many countries. Germany’s purchasing managers’ index slowed to 47.1 (a reading under 50.0 indicates retraction), Japan’s PMI was 48.9, the United Kingdom’s PMI fell to 45.3, while the Eurozone’s PMI dipped to 47.8. For January, the STOXX Europe 600 Index added 4.1%; the United Kingdom’s FTSE advanced 2.6%; Japan’s Nikkei 225 Index gained 4.7%; and China’s Shanghai Composite Index rose 4.5%.
• Consumer confidence: The Conference Board Consumer Confidence Index® decreased in January, following an upwardly revised increase in December 2022. The index stands at 107.1, down from 109.0 in December. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, rose to 150.9 in January, up from 147.4 in the previous month. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — fell to 77.8 in January, down from 83.4 in December. According to the Conference Board’s report, an Expectations Index reading below 80.0 could signal a recession within the next year.

Eye on the Month Ahead

Inflationary pressures showed regression in January, which could prompt the Federal Reserve to scale back interest-rate hikes beginning on the first of February, following the Committee’s next meeting. As inflation waned, so did the economy. Close attention will be paid to the labor report and other inflation data, including the consumer price index and the personal consumption expenditures price index. The world economy will get a boost if China remains open to trade, despite growing COVID cases.

The Markets (as of market close January 27, 2023)

Wall Street ended last week higher on favorable inflation, economic, and corporate earnings data. Investors now must await the Federal Reserve’s meeting this week to see whether the Fed will soften its policy of aggressive interest-rate hikes. Fourth-quarter corporate earnings season is wide open with roughly 68% of the companies comprising the S&P 500 reporting earnings ahead of consensus estimates. Each of the benchmark indexes listed here posted solid gains by the end of last week, led by the tech-heavy Nasdaq. Heading into the final two trading days of January, the Nasdaq has gained 11.0%, while the Russell 2000 and the Global Dow are up over 8.0%. Crude oil prices closed the week lower ahead of the upcoming OPEC+ committee meeting coupled with the European Union’s ban on Russian oil products. Ten-year Treasury yields inched higher, while the dollar and gold prices slipped.

Tech shares led a stock market rally last Monday ahead of earnings reports from several major technology companies. The Nasdaq gained 2.0%, with the Russell 2000 adding 1.3% and the S&P 500 climbing 1.2%. The Dow and the Global Dow rose 0.8%. Ten-year Treasury yields gained 4.1 basis points, closing at 3.52%. Crude oil prices continued to advance, reaching $81.69 per barrel. The dollar was flat, while gold prices advanced.

The stock rally ended last Tuesday as only the Dow and the Global Dow were able to post modest gains. The Nasdaq and the Russell 2000 slid 0.3%, while the S&P 500 dipped 0.1%. Bond prices advanced, pulling yields lower. Ten-year Treasury yields closed at 3.46%, after falling 5.6 basis points. Crude oil prices ended the day at around $80.10 per barrel, down $1.52 from the previous day. The dollar fell marginally, while gold prices continued to advance, gaining $9.70 to reach $1,938.30 per ounce.

Stocks ended last Wednesday mixed as investors sifted through a boatload of corporate earnings data. The Russell 2000 and the Global Dow eked out 0.3% gains, the Dow and the S&P 500 ended close to where they began, while the Nasdaq dipped 0.2%. The yield on 10-year Treasuries was flat, the dollar slipped lower, while gold prices climbed to $1,946.40 per ounce. Crude oil prices rose marginally to $80.49 per barrel.

Wall Street ended a choppy session higher last Thursday, with each of the benchmark indexes posting gains. The Nasdaq led the charge, adding 1.8%, followed by the S&P 500 (1.1%), the Russell 2000 (0.7%), and the Dow and the Global Dow (0.6%). Ten-year Treasury yields rose to 3.49%. Crude oil prices rose nearly $1.00 to $81.10 per barrel. The dollar inched higher, while gold prices fell for the first time in several sessions.

Stocks reversed course from the previous day, closing last Friday higher. The Nasdaq gained 1.0% to lead the benchmark indexes listed here, followed by the Russell 2000 and the Global Dow, which added 0.4%. The S&P 500 rose 0.3% and the Dow inched up 0.1%. The yield on 10-year Treasuries gained 2.5 basis points to close at 3.51%. Crude oil prices slid $1.60, the first decline in several sessions, closing the week at $79.41 per barrel. The dollar gained marginally, while gold prices fell for the second consecutive day.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 1/27	Weekly Change	YTD Change
DJIA	33,147.25	33,375.49	33,978.08	1.81%	2.51%
Nasdaq	10,466.48	11,140.43	11,621.71	4.32%	11.04%
S&P 500	3,839.50	3,972.61	4,070.56	2.47%	6.02%
Russell 2000	1,761.25	1,867.34	1,911.46	2.36%	8.53%
Global Dow	3,702.71	3,927.89	4,004.70	1.96%	8.16%
Fed. Funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	3.87%	3.48%	3.51%	3 bps	-36 bps
US Dollar-DXY	103.48	101.97	101.92	-0.05%	-1.51%
Crude Oil-CL=F	$80.41	$81.40	$79.46	-2.38%	11.18%
Gold-GC=F	$1,829.70	$1,928.90	$1,928.20	-0.04%	5.38%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The advance estimate of the fourth-quarter gross domestic product showed the economy accelerated at an annualized rate of 2.9%. GDP rose 3.2% in the previous quarter, after falling 1.6% and 0.6% in the first and second quarters, respectively. Personal consumption expenditures, a measure of consumer spending and a main contributor to GDP, rose 2.1% in the fourth quarter, largely due to a 2.6% increase in spending on services. Consumer spending on goods rose 1.1%. Fixed investment fell 6.7% in the fourth quarter, pulled lower by a 26.7% dip in residential fixed investment. Exports dipped 1.3% in the fourth quarter, while imports fell 4.6%. The personal consumption expenditures price index, a measure of inflation, increased 3.2%, compared with an increase of 4.7% in the third quarter.
• According to the latest report on personal income and outlays, consumer prices rose 0.1% in December, the same increase as in November. Excluding food and energy, consumer prices increased 0.3%. In December, prices for goods decreased 0.7%, while prices for services increased 0.5%. Food prices increased 0.2% and energy prices decreased 5.1%. From the same month one year ago, prices for December increased 5.0%. Prices for goods increased 4.6% and prices for services increased 5.2%. Food prices increased 11.2% and energy prices increased 6.9%. Excluding food and energy, consumer prices increased 4.4% from December 2021. Also, according to the latest personal income and outlays report for December, personal income and consumer spending slowed from November. Personal income increased 0.2% (0.3% in November), disposable personal income rose 0.3% (the same as in November), and consumer spending (as measured by personal consumption expenditures) fell 0.2% after decreasing 0.1% in November.
• Sales of new single-family homes increased for the second consecutive month in December, climbing 2.3% over the November pace. However, sales are down 26.6% from December 2021. The median sales price of new houses sold in December was $442,100, while the average sales price was $528,400. Inventory of new single-family homes for sale in December represented a supply of 9.0 months at the current sales pace.
• The international trade in goods deficit for December was $90.3 billion, up 8.8% from the November deficit. Exports of goods for December were $166.8 billion, 1.6% less than November exports. Imports of goods for December were $257.1 billion, 1.9% more than November imports. The goods deficit decreased 10.2% from December 2021.
• New orders for manufactured durable goods rose $15.3 billion, or 5.6%, in December. Excluding transportation, new orders decreased 0.1%. Excluding defense, new orders increased 6.3%. Transportation equipment, up four of the last five months, drove the increase, climbing $15.5 billion, or 16.7%. Durable goods orders increased 10.5% in 2022.
• Regular retail gas prices continued to rise across the country last week, according to the U.S. Energy Information Administration. The national average retail price for regular gasoline was $3.415 per gallon on January 23, $0.105 per gallon above the prior week’s price and $0.092 higher than a year ago. Also, as of January 23, the East Coast price increased $0.125 to $3.384 per gallon; the Gulf Coast price dipped $0.120 to $3.092 per gallon; the Midwest price climbed $0.099 to $3.304 per gallon; the West Coast price increased $0.041 to $4.008 per gallon; and the Rocky Mountain price advanced $0.142 to $3.434 per gallon. Residential heating oil prices averaged $4.706 per gallon on January 23, $0.108 above the previous week’s price and $1.035 per gallon more than a year ago.
• For the week ended January 21, there were 186,000 new claims for unemployment insurance, a decrease of 6,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 14 was 1.2%, an increase of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended January 14 was 1,675,000, an increase of 20,000 from the previous week’s level, which was revised up by 8,000. States and territories with the highest insured unemployment rates for the week ended January 7 were New Jersey (2.5%), Rhode Island (2.4%), Alaska (2.3%), Minnesota (2.3%), California (2.2%), Massachusetts (2.1%), Montana (2.1%), Puerto Rico (2.1%), Illinois (2.0%), and New York (1.9%). The largest increases in initial claims for unemployment insurance for the week ended January 14 were in California (+3,867), Kentucky (+2,599), Puerto Rico (+713), Virginia (+698), and Maryland (+446), while the largest decreases were in New York (-17,408), Michigan (-5,504), Georgia (-4,823), Wisconsin (-4,055), and New Jersey (-3,822).

Eye on the Week Ahead

The Federal Open Market Committee meets at the beginning of the week. Most observers suggest the Fed will raise interest rates by 50 basis points, although recent economic indicators have shown inflationary pressures are slowing, which could prompt a slowdown in rate hikes. Also out this week is the January employment report. Job growth has been relatively steady over the past 12 months, with 223,000 new jobs added in December.

The Markets (as of market close January 20, 2023)

Last week saw stocks slide lower, despite a rally last Friday. Only the tech-heavy Nasdaq was able to post a gain among the benchmark indexes listed here. Throughout the week, investors had to balance data that showed inflation was waning with the impact rising interest rates may have on the economy. Several Federal Reserve officials indicated that now was not the time to stop interest-rate increases, but it may be appropriate to slow the pace of those hikes. While stock values slipped last week, Treasury yields declined, with 10-year Treasury yields falling for the third week in a row. Crude oil prices climbed higher for the second straight week on optimism over China’s anticipated increase in demand. The dollar held relatively steady, while gold prices increased $7.00 per ounce.

Stocks ended a four-day rally last Tuesday, with the Dow falling 1.1%. The S&P 500 dipped 0.1% and the Russell 2000 slid 0.2%. The Global Dow ended the day flat, while the Nasdaq eked out a 0.1% gain. Ten-year Treasury yields added 2.4 basis points to close at 3.53%. The dollar moved very little, while gold prices fell more than $10.00 per ounce. Crude oil prices rose $1.18 to hit $81.04 per barrel.

Last Wednesday saw stocks continue to decline as investors tried to balance favorable inflation data with weak economic information and hawkish Federal Reserve comments. The Dow fell 1.8%, ending its worst session of the new year. The Russell 2000 and the S&P 500 slipped 1.6%, the Nasdaq dropped 1.2%, while the Global Dow lost 0.8%. Bond prices jumped higher, pulling yields lower. Ten-year Treasury yields ended the day 16.0 basis points lower, falling to 3.37%. Crude oil prices fell for the first time in several sessions, closing at around $79.14 per barrel. The dollar was flat, while gold prices dipped less than 0.2%.

Stocks fell for the third straight day last Thursday as investors continued to fret about the economic impact of rising interest rates. The Global Dow led the declining benchmark indexes, falling 1.2%, followed by the Russell 2000 and the Nasdaq, which dipped 1.0%. The S&P 500 and the Dow fell 0.8%. Crude oil prices increased $0.42 to hit $80.75 per barrel. The dollar edged higher, while gold prices rose $8.00 to $1,931.90 per ounce. Ten-year Treasury yields inched up to 3.39%.

In what is likely the result of dip buying, stocks ended their three-day decline last Friday, closing higher to end the week. Tech shares led the rally, with the Nasdaq finishing the session up 2.7%, followed by the S&P 500 (1.9%), the Russell 2000 (1.6%), the Global Dow (1.2%), and the Dow (1.0%). Bond prices slid lower, driving yields higher, with 10-year Treasury yields adding 8.7 basis points to 3.48%. Crude oil prices rose to $81.40 per barrel. The dollar was flat, while gold prices continued to climb higher, reaching $1,928.90 per ounce.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 1/20	Weekly Change	YTD Change
DJIA	33,147.25	34,302.61	33,375.49	-2.70%	0.69%
Nasdaq	10,466.48	11,079.16	11,140.43	0.55%	6.44%
S&P 500	3,839.50	3,999.09	3,972.61	-0.66%	3.47%
Russell 2000	1,761.25	1,887.03	1,867.34	-1.04%	6.02%
Global Dow	3,702.71	3,954.10	3,927.89	-0.66%	6.08%
Fed. Funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	3.87%	3.51%	3.48%	-3 bps	-39 bps
US Dollar-DXY	103.48	102.18	101.97	-0.21%	-1.46%
Crude Oil-CL=F	$80.41	$79.96	$81.40	1.80%	1.23%
Gold-GC=F	$1,829.70	$1,921.90	$1,928.90	0.36%	5.42%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Prices producers received for goods and services declined 0.5% in December, according to the latest information from the Bureau of Labor Statistics. This is the first monthly decline in producer prices since August. Prices for goods fell 1.6% in December, while prices for services rose 0.1%. Producer prices less foods, energy, and trade inched up 0.1% last month. Prices for foods decreased 1.2%, energy prices fell 7.9%, while margins received by wholesalers and retailers for trade services rose 0.3%. Overall, producer prices rose 6.2% in 2022 after rising 10.0% in 2021.
• Retail sales decreased 1.1% in December after falling 1.0% in November. Retail prices rose 9.2% in 2022. In December, retail trade sales were down 1.2% from November, but up 5.2% from December 2021. Nonstore (online) retailer sales were up 13.7% from December 2021, while sales at food services and drinking places were up 12.1% from last year. A decrease in consumer spending will negatively impact the gross domestic product.
• Industrial production decreased 0.7% in December and 1.7% at an annual rate in the fourth quarter. In December, manufacturing output fell 1.3% amid widespread declines across the sector. The index for utilities jumped 3.8%, as cold temperatures boosted the demand for heating, while the index for mining moved down 0.9%. Total industrial production in December was 1.6% above its level from a year ago.
• The number of residential building permits issued in December was 1.6% below the November figure, and 29.9% under the December 2021 rate. Issued building permits for single-family homes declined 6.5% in December from a month earlier. In December, privately-owned housing starts were 1.4% below the November estimate and 21.8% behind the December 2021 pace. Single-family housing starts in December were 11.3% above the November figure. Housing completions were 8.4% below the November estimate, but 6.4% above the December 2021 rate. Single-family housing completions in December were 8.0% under the November rate.
• Re-sales of existing homes fell for the 11th straight month in December, down 1.5% from the November figure. Since December 2021, sales of existing homes dropped 34.0%. Unsold inventory sits at a 2.9-month supply at the current sales pace, down from 3.3 months in November but up from 1.7 months in December 2021. The median existing-home price for all housing types in December was $366,900, down from $372,000 in November but up 2.3% from December 2021 ($358,800), marking the 130th consecutive month of year-over-year price increases. Sales of single-family homes declined 1.1% in December from the previous month and 33.5% from December 2021. The median existing single-family home price was $372,700 in December, down 1.6% from the November price of $378,700 but up 2.0% from December 2021 ($365,300).
• Prices at the pump moved higher across the country last week, according to the U.S. Energy Administration. The national average retail price for regular gasoline was $3.310 per gallon on January 16, $0.051 per gallon above the prior week’s price but $0.004 lower than a year ago. Also, as of January 16, the East Coast price increased $0.043 to $3.259 per gallon; the Gulf Coast price dipped $0.082 to $2.972 per gallon; the Midwest price climbed $0.060 to $3.205 per gallon; the West Coast price increased $0.006 to $3.967 per gallon; and the Rocky Mountain price advanced $0.170 to $3.292 per gallon. Residential heating oil prices averaged $4.606 per gallon on January 16, $0.060 above the previous week’s price and $1.006 per gallon more than a year ago.
• For the week ended January 14, there were 190,000 new claims for unemployment insurance, a decrease of 15,000 from the previous week’s level. Initial claim filings haven’t been this low since September 24, 2022. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended January 7 was 1.1%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended January 7 was 1,647,000, an increase of 17,000 from the previous week’s level, which was revised down by 4,000. States and territories with the highest insured unemployment rates for the week ended December 31 were New Jersey (2.6%), Rhode Island (2.6%), Alaska (2.4%), Minnesota (2.3%), Massachusetts (2.1%), Montana (2.1%), New York (2.1%), California (2.0%), and Puerto Rico (2.0%). The largest increases in initial claims for unemployment insurance for the week ended January 7 were in California (+17,447), New York (+17,285), Texas (+10,178), Georgia (+8,494), and Florida (+3,209), while the largest decreases were in New Jersey (-4,064), Connecticut (-2,202), Iowa (-1,891), Massachusetts (-1,585), and Oregon (-1,525).

Eye on the Week Ahead

There’s plenty of important economic data available this week. The first estimate of the fourth-quarter 2022 gross domestic product is available. The third-quarter GDP showed the economy advanced at a rate of 3.2% after regressing in each of the first two quarters. Also out this week is the December release of the personal income and outlays report. Included in this information is the personal consumption expenditures price index, an inflation indicator favored by the Federal Reserve. The PCE price index inched up 0.1% in November.

The Markets (as of market close January 13, 2023)

Stocks advanced for the second week in a row to kick off 2023. Investors were encouraged by inflation data that showed prices slid lower in December. The interest-rate-sensitive Nasdaq posted gains for six consecutive sessions, its longest streak since 2021, while the Nasdaq and the S&P 500 enjoyed their biggest weekly gains in nearly two months. China’s economic reopening boosted prospects for increased energy demand, sending crude oil prices higher. The dollar declined last week, which helped gold prices surge to the highest level since April.

Last Monday saw stocks end the day with mixed results. Among the benchmark indexes listed here, the Nasdaq and the Global Dow gained 0.6%, while the Russell 2000 advanced 0.2%. The large caps of the Dow (-0.3%) and the S&P 500 (-0.1%) ended the session lower after trending up most of the day. Investors’ hopes for a softening of interest-rate hikes were dampened by a few Federal Reserve officials who suggested that interest rates could hit 5.0%. Bond prices advanced pulling yields lower, with 10-year Treasury yields falling 5.2 basis points to 3.51%. Crude oil prices rose to $74.81 per barrel. The dollar slid lower, while gold prices rose more than a quarter of a percent to $1,875.70 per ounce.

Stocks jumped higher last Tuesday on hopes that the consumer price index for December will show further softening, which could prompt the Federal Reserve to slow the pace of its interest-rate hikes. The Russell 2000 led the benchmark indexes, gaining 1.5%, followed by the Nasdaq (1.0%), the S&P 500 (0.7%), the Dow (0.6%), and the Global Dow (0.2%). As stock values rose, bond prices fell, pushing yields higher, with 10-year Treasury yields adding 10.4 basis points to close at 3.62%. Crude oil prices changed little from the previous day. The dollar and gold prices advanced.

Equities advanced last Wednesday for a second consecutive day as investors seemed to be betting that inflation would continue to soften, strengthening the case for a Federal Reserve pullback on interest-rate hikes. The Nasdaq led the benchmark indexes, gaining 1.8%. The S&P 500 jumped 1.35, followed by the Russell 2000 (1.1%), the Dow (0.8%), and the Global Dow (0.7%). Ten-year Treasury yields fell 6.7 basis points to 3.55%. Crude oil prices rose 3.4% to $77.65 per barrel, supported by expectations of stronger demand from China. The dollar inched higher, while gold prices continued to rally, adding $4.10 per ounce to reach $1,880.60 per ounce.

Not surprisingly, investors were encouraged after the release of the latest consumer price index (see below). Stocks advanced for the third consecutive day last Thursday, led by the Russell 2000 (1.7%) and the Global Dow (1.4%). The Dow and the Nasdaq rose 0.6%, while the S&P 500 gained 0.3%. Ten-year Treasury yields fell 10.5 basis points to 3.44%. Crude oil prices rose to $78.34 per barrel. The dollar edged lower, while gold prices climbed higher, hitting $1,900.80 per ounce.

Stocks continued their rally last Friday. The Nasdaq and the Global Dow gained 0.7%, while the Russell 2000 rose 0.6%, the S&P 500 advanced 0.4%, and the Dow climbed 0.3%. Ten-year Treasury yields added 6.2 basis points to close at 3.51%. Crude oil prices advanced $1.57 to reach $79.96 per barrel. The dollar slipped for the second consecutive day, while gold prices vaulted up 1.3% to $1,921.90 per ounce.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 1/13	Weekly Change	YTD Change
DJIA	33,147.25	33,630.61	34,302.61	2.00%	3.49%
Nasdaq	10,466.48	10,569.29	11,079.16	4.82%	5.85%
S&P 500	3,839.50	3,895.08	3,999.09	2.67%	4.16%
Russell 2000	1,761.25	1,792.80	1,887.03	5.26%	7.14%
Global Dow	3,702.71	3,829.24	3,954.10	3.26%	6.79%
Fed. Funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	3.87%	3.56%	3.51%	-5 bps	-36 bps
US Dollar-DXY	103.48	103.90	102.18	-1.66%	-1.26%
Crude Oil-CL=F	$80.41	$73.66	$79.96	8.55%	-0.56%
Gold-GC=F	$1,829.70	$1,872.30	$1,921.90	2.65%	5.04%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Good news on the inflation front. The December consumer price index fell 0.1%. Excluding food and energy, the CPI rose 0.3% last month. In December, prices for food rose 0.3% (0.5% in November), energy prices fell 4.5% (-1.6% in November), while prices for shelter rose 0.8% (0.6% in November). Over the last 12 months ended in December, the CPI has increased 6.5%, the smallest increase since the period ended in October 2021. For the 12 months ended in December, core prices (less food and energy) rose 5.7%, energy prices increased 7.3%, and food prices advanced 10.4%. All of these increases were smaller than for the 12-month period ended in November.
• Import prices rose 0.4% in December after declining 0.6% in November. Export prices fell 2.6%, following a 0.3% drop the previous month. The increase in import prices was the first since June 2022. Import prices increased 3.5% since December 2021. Fuel import prices rose 0.6% in December, while nonfuel prices increased 0.4%. Export prices haven’t increased since June 2022. Prices for exports rose 5.0% for the 12 months ended in December, the smallest 12-month advance since January 2021.
• The Treasury budget deficit for December was $85.0 billion, well above the $21.0 billion deficit of a year ago but well under the November deficit of $248.5 billion. For the first three months of the 2023 fiscal year, the deficit sat at $421.4 billion, up from $377.7 billion over the same period in fiscal year 2022. Compared to the same period last fiscal year, government expenditures increased $17.4 billion, while government receipts are down $26.3 billion.
• According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.259 per gallon on January 9, $0.036 per gallon above the prior week’s price but $0.036 lower than a year ago. Also, as of January 9, the East Coast price increased $0.006 to $3.216 per gallon; the Gulf Coast price dipped $0.001 to $2.890 per gallon; the Midwest price climbed $0.095 to $3.145 per gallon; the West Coast price increased $0.022 to $3.961 per gallon; and the Rocky Mountain price advanced $0.079 to $3.122 per gallon. Residential heating oil prices averaged $4.545 per gallon on January 9, $0.118 below the previous week’s price but $1.085 per gallon more than a year ago. Looking ahead, U.S. crude oil production is forecast to reach record highs in 2023 (12.4 million barrels per day) and 2024 (12.8 million barrels per day), which would surpass the previous annual record high of 12.3 million barrels per day.
• For the week ended January 7, there were 205,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 31 was 0.1%, a decrease of one percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 31 was 1,634,000, a decrease of 63,000 from the previous week’s level, which was revised up by 3,000. States and territories with the highest insured unemployment rates for the week ended December 24 were Alaska (2.3%), New Jersey (2.2%), Minnesota (2.2%), California (2.0%), Montana (2.0%), Rhode Island (2.0%), Puerto Rico (1.9%), Massachusetts (1.9%), Washington (1.8%), Illinois (1.7%), and New York (1.7%). The largest increases in initial claims for unemployment insurance for the week ended December 31 were in New Jersey (+4,514), Michigan (+3,322), New York (+3,169), Massachusetts, (+2,670), and Pennsylvania (+2,401), while the largest decreases were in Kentucky (-3,808), Illinois (-3,439), Texas (-3,252), Missouri (-2,882), and Minnesota (-880).

Eye on the Week Ahead

There’s plenty of potentially market-moving economic data out this week. The producer price index, which measures the change in prices from the perspective of the seller of goods and services, is an important inflation indicator. Producer prices rose 0.3% in November and were up 7.4% for the year. The retail sales report for December is also out this week. Retail sales fell 0.6% in November. The Federal Reserve’s report on industrial production for December is on tap for release this week. Industrial production slid 0.2% in November. The housing sector waned for much of 2022. The December figures for housing starts, completions, and issued building permits are available this week as is the December report on existing home sales.

The Markets (as of market close January 6, 2023)

Last Friday’s rally helped drive stocks higher to end the first full week of January. Investors apparently saw a deceleration in November and December average hourly earnings (see jobs report below) as a sign that the aggressive monetary policy followed by the Federal Reserve may actually be slowing inflation. Traders will await this week’s consumer price index to get a better gauge on the direction of inflationary pressures. Nevertheless, stocks closed last week higher, led by the Global Dow. The large caps of the Dow and the S&P 500 boasted solid gains, as did the small caps of the Russell 2000. Ten-year Treasury yields fell on rising bond prices. Crude oil prices declined nearly $7.00 per barrel. The dollar rose marginally, while gold prices advanced.

Stocks finished the first trading session of 2023 lower. Wall Street was closed last Monday in observance of New Year’s day. However, investors weren’t in a spending mood last Tuesday, particularly with respect to megacap stocks. The Nasdaq continued its 2022 downward spiral, declining 0.8%. The Russell 2000 slid 0.6%, the S&P 500 lost 0.4%, while the Dow ended the day flat. The Global Dow was able to eke out a 0.2% gain. Bond prices rose, driving the yield on 10-year Treasuries down 8.6 basis points to 3.79%. The dollar advanced the most in nearly three weeks, while gold prices reached their highest values since mid-June. Crude oil prices lost nearly 4.0%, falling to $77.15 per barrel.

Wall Street snapped a two-day losing streak last Wednesday. The Global Dow led the benchmark indexes listed here, gaining 1.4%, followed by the S&P 500 (0.8%), the Nasdaq (0.7%), the Russell 2000 (0.6%), and the Dow (0.4%). Ten-year Treasury yields fell 8.4 basis points, closing at 3.70%, as long-term bond values rose for the second consecutive day. Weakening demand sent crude oil prices lower to $73.24 per barrel. The dollar slipped lower, while gold prices notched a second consecutive strong performance.

Stocks ended last Thursday’s session lower as investors grappled with the prospect of another strong labor report, due out the following day. The Federal Reserve has focused, in part, on the strength of the labor sector. A strong December jobs report would likely give the Fed room to keep up its aggressive policy aimed at stemming rising inflation. Among the indexes listed here, the Nasdaq fell the furthest, losing 1.5%, followed by the S&P 500 (-1.2%), the Russell 2000 (-1.1%), the Dow (-1.0%), and the Global Dow (-0.5%). Ten-year Treasury yields inched up to 3.72%. The dollar added nearly 0.9%, while gold prices fell 1.1%. Crude oil prices rose less than $1.00 to close at about $73.75 per barrel.

Wall Street enjoyed its first major rally of 2023 last Friday. Each of the benchmark indexes listed here gained more than 2.0%, led by the Nasdaq (2.6%), followed by the S&P 500 (2.3%), the Russell 2000 and the Global Dow (2.2%), and the Dow (2.1%). Bond prices jumped higher, pulling yields lower. Ten-year Treasury yields fell 15.1 basis points to close the week at 3.56%. Crude oil prices ended the day flat, remaining at $73.66 per barrel. The dollar dipped lower, while gold prices recouped the prior day’s losses after gaining 1.72%.

Stock Market Indexes

Market/Index	2022 Close	Prior Week	As of 1/6	Weekly Change	YTD Change
DJIA	33,147.25	33,147.25	33,630.61	1.46%	1.46%
Nasdaq	10,466.48	10,466.48	10,569.29	0.98%	0.98%
S&P 500	3,839.50	3,839.50	3,895.08	1.45%	1.45%
Russell 2000	1,761.25	1,761.25	1,792.80	1.79%	1.79%
Global Dow	3,702.71	3,702.71	3,829.24	3.42%	3.42%
Fed. Funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	3.87%	3.87%	3.56%	-31 bps	-31 bps
US Dollar-DXY	103.48	103.48	103.90	0.41%	0.41%
Crude Oil-CL=F	$80.41	$80.41	$73.66	-8.39%	-8.39%
Gold-GC=F	$1,829.70	$1,829.70	$1,872.30	2.33%	2.33%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Employment increased by 223,000 in December, according to the latest report from the Bureau of Labor Statistics. It is worth noting that employment gains in October and November were revised lower to 263,000 (from 284,000) and 256,000 (from 263,000), respectively. Notable job gains occurred in leisure and hospitality, health care, construction, and social assistance. Employment rose by 4.5 million in 2022 (an average monthly gain of 375,000), less than the increase of 6.7 million in 2021 (an average monthly gain of 562,000). The unemployment rate edged down 0.1 percentage point to 3.5%. The unemployment rate has remained within a range of 3.5%-3.7% since March. The number of unemployed persons decreased by 278,000 to 5.7 million. The employment-population ratio increased by 0.2 percentage point over the month to 60.1%. The labor force participation rate edged up 0.1 percentage point to 62.3%. Both measures have shown little net change since early 2022. In December, average hourly earnings rose by $0.09, or 0.3%, to $32.82. Over the past 12 months ended in December, average hourly earnings have increased by 4.6%, which is lower than the 12-month increase from November 2021 (5.1%). The average work week decreased by 0.1 hour in December to 34.3 hours. Wages have decelerated in November and December, which could be a sign that inflation is easing. However, statistically, there are nearly two available jobs for every unemployed person, so job growth is likely to continue.
• According to the latest information from the Census Bureau, the international trade in goods and services deficit was $61.5 billion in November, $16.3 billion less than the October deficit. The November trade deficit was the lowest since July 2020. November exports were $251.9 billion, $5.1 billion less than October exports. November imports were $313.4 billion, $21.5 billion less than October imports. Overall, the November decline in both imports and exports may indicate weakening domestic and foreign demand entering the holiday shopping season. Year to date, the goods and services deficit increased $120.1 billion, or 15.7%, from the same period in 2021. Exports increased $439.4 billion, or 18.9%. Imports increased $559.5 billion, or 18.1%.
• The number of job openings was little changed at 10.5 million on the last business day of November, according to the latest Job Openings and Labor Turnover report from the U.S. Bureau of Labor Statistics. Over the month, the number of hires and total separations changed little at 6.1 million and 5.9 million, respectively. Within separations, quits, layoffs, and discharges changed little.
• The results of the survey of purchasing managers revealed manufacturing declined at the fastest rate since May 2020, and was one of the sharpest reductions since 2009. The S&P Global US Manufacturing PMI™ was 46.2 in December, down from 47.7 in November. A reading of less than 50.0 indicates a decrease in manufacturing. Survey respondents indicated that the decline stemmed from weak client demand, which decreased new orders and output. Employment waned and backlogs of work fell sharply. Companies noted that weak client demand stemmed from economic uncertainty and inflationary pressures, leading to lower purchasing power among customers.
• Business suffered a sharp decline in the services sector in December, according to the latest survey of purchasing managers. The S&P Global US Services PMI Business Activity Index registered 44.7 in December, down from 46.2 in November. The rate of decline in services output accelerated for the third month running and was the second-fastest since May 2020. Lower business activity was attributed to a reduction in new orders, as client demand weakened due to the impact of higher interest rates and inflation on customer spending.
• Retail prices for regular gasoline rose for the first time in several weeks. According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.223 per gallon on January 2, $0.132 per gallon above the prior week’s price but $0.058 lower than a year ago. Also, as of January 2, the East Coast price increased $0.139 to $3.210 per gallon; the Gulf Coast price rose $0.207 to $2.891 per gallon; the Midwest price climbed $0.151 to $3.050 per gallon; the West Coast price increased $0.029 to $3.939 per gallon; and the Rocky Mountain price advanced $0.041 to $3.043 per gallon. Residential heating oil prices averaged $4.663 per gallon on January 2, $0.025 above the previous week’s price and $1.273 per gallon more than a year ago.
• For the week ended December 31, there were 204,000 new claims for unemployment insurance, a decrease of 19,000 from the previous week’s level, which was revised down by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 24 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 24 was 1,694,000, a decrease of 24,000 from the previous week’s level, which was revised up by 8,000. States and territories with the highest insured unemployment rates for the week ended December 17 were Alaska (2.3%), New Jersey (2.1%), Minnesota (2.0%), California (1.9%), Puerto Rico (1.9%), Montana (1.8%), Massachusetts (1.8%), Rhode Island (1.8%), New York (1.7%), and Washington (1.6%). The largest increases in initial claims for unemployment insurance for the week ended December 24 were in Missouri (+4,974), Kentucky (+4,133), Washington (+2,197), New York (+2,097), and Ohio (+2,026), while the largest decreases were in California (-3,234), Georgia (-1,568), Texas (-1,455), Florida (-1,090), and North Carolina (-888).

Eye on the Week Ahead

The first full week of 2023 kicks off with important inflationary data, with the release of the consumer price index and the report on import and export prices. Inflation may be showing signs that it has peaked. The CPI in November rose 0.1% and 7.1% from November 2021.

Overview

The year 2022 may best be described by one word: inflation. The economies of the United States and the world were influenced by rising inflation, its causes, and the policies aimed at curtailing it. While inflationary pressures began to mount in 2021, they were exacerbated by continuing supply shortages; the ongoing effects of the COVID-19 pandemic, both here and abroad; the Russian invasion of Ukraine; and a global energy crisis.

Early in 2022, the Federal Reserve expected inflation to reach 2.6% by the end of the year, not much above their 2.0% target. Federal officials expected supply bottlenecks to ease, economies to re-open after relaxing COVID-related restrictions, and economic activity to return to something close to normal.

Unfortunately, the Fed underestimated how rising wages, federal aid, and expanded savings would lead to increased consumer spending, which continued to outpace supply, and drive prices higher. Most importantly, Fed officials didn’t foresee the impact the Russian invasion of Ukraine would have on world trade in energy, food commodities, and resources such as natural gas and crude oil. And inflation was not just felt in the U.S. but throughout world economies as well. The International Monetary Fund expects worldwide inflation to hit 8.8%, the highest rate since 1996. In response, the Federal Reserve began the most aggressive policy of interest-rate hikes in more than 15 years.

Consumer price indexes in the 19 countries that use the euro currency rose to 10.0% or higher in November from a year earlier, while prices for food rose at a faster pace. Inflationary pressures also impacted world economies in the Middle East, Africa, South America, Canada, and Mexico. Rising inflation made countries’ imports more expensive and forced central banks to raise interest rates. The U.S. dollar surged in value against most world currencies, weakening foreign currencies and contributing to rising prices for goods and services.

While overall inflationary pressures may have peaked as we close out 2022, food and energy prices remain elevated. Energy prices led the price surge at the beginning of the year. Crude oil prices rose to more than $110.00 per barrel for the first time since 2011. Energy prices, which were already rising at the end of 2021, were sent soaring following the Russian invasion of Ukraine as Russian refining capacity diminished amidst sanctions and trade restrictions imposed by several countries.

However, energy prices have since stabilized somewhat. Helping to stem surging oil prices was a notable retreat in Chinese energy demand amidst COVID-related restrictions; the stabilization of Russian crude output; increased U.S. oil production; and a release of oil from the Strategic Petroleum Reserve.

The U.S. economy saw a slowdown in growth for much of 2022. Gross domestic product contracted in the first two quarters of the year after advancing at an annualized rate of 5.9% in 2021. But GDP rebounded in the third quarter, climbing 3.2%. Although inflation has cut into consumers’ purchasing power, they have continued to spend during difficult economic times, supported by rising wages, job growth, and access to savings accumulated during the pandemic.

Industrial production lagged through the summer months, only to rebound during the latter part of 2022, ultimately exceeding its pace from a year earlier. The housing sector was hit particularly hard by rising mortgage rates and diminished inventory. Existing home sales were more than 35.0% below their pace in 2021, while sales of new single-family homes lagged by more than 15.0%.

Inflation also impacted the stock market, both at home and abroad. Several market sectors that had led the bull surge since 2008 suffered notable pullbacks. Information technology and communication services ended up as two of the worst performing sectors in 2022. Retail stocks also took a tumble as inflation drove up nondiscretionary items like food and energy, leaving less for consumers to spend on discretionary products and services. Also plaguing retailers were rising costs associated with products, services, and labor.

This past year was not only a difficult one for stocks and bonds, but also for “alternative assets” such as crypto. Rising interest rates impacted the viability of crypto. Couple this with revelations of fraud and abuse, and crypto assets have fallen precipitously.

Nevertheless, as 2022 draws to a close, there are some positives to consider entering the new year. The GDP expanded for the first time in the third quarter, and crude oil and gas prices reversed course and dipped lower. Primary inflationary indicators, such as the consumer price index and the personal consumption expenditures price index, trended lower at the end of the year. Ultimately, the economic outlook for 2023 will likely depend on the path of inflation and whether the economies of the U.S. and the world can avoid a recession as prices are driven lower.

Market/Index	2021 Close	As of 9/30	2022 Close	Month Change	Q4 Change	2022 Change
DJIA	36,338.30	28,725.51	33,147.25	-4.17%	15.39%	-8.78%
Nasdaq	15,644.97	10,575.62	10,466.48	-8.73%	-1.03%	-33.10%
S&P 500	4,766.18	3,585.62	3,839.50	-5.90%	7.08%	-19.44%
Russell 2000	2,245.31	1,664.72	1,761.25	-6.64%	5.80%	-21.56%
Global Dow	4,137.63	3,168.34	3,702.71	-2.12%	16.87%	-10.51%
Fed. Funds	0.00%-0.25%	3.00%-3.25%	4.25%-4.50%	50 bps	125 bps	425 bps
10-year Treasuries	1.51%	3.80%	3.87%	17 bps	7 bps	236 bps
US Dollar-DXY	95.64	112.17	103.48	-2.40%	-7.75%	8.20%
Crude Oil-CL=F	$75.44	$79.67	$80.41	0.00%	0.93%	6.59%
Gold-GC=F	$1,830.30	$1,670.50	$1,829.70	2.62%	9.53%	-0.03%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Snapshot 2022

The Markets

• Equities: Stocks began 2022 on a sour note, ending January and February in the red. Unfortunately, things didn’t get much better for the remainder of the year. Following a bull market that lasted more than 10 years, stocks experienced a sizeable pullback. The benchmark indexes listed here declined in each of the first three quarters of 2022. The Nasdaq lost more than 33.0% on the year, negatively impacted by the Federal Reserve’s aggressive, inflation-fighting policy, which hampered tech and growth stocks. While Wall Street showed some resilience in the fourth quarter, stocks suffered their worst year since the financial crisis of 2008.
• On the last day of the year, each of the benchmark indexes listed here ended the year lower, despite a solid fourth quarter. Among the market sectors, only energy advanced, gaining a robust 59.04%. The remaining market sectors lost value, led by communication services (-40.4%) and followed by consumer discretionary (-37.6%), information technology (-28.9%), real estate (-28.5%), materials (-14.1%), financials (-12.4%), industrials (-7.1%), health care (-3.6%), consumer staples (-3.2%), and utilities (-1.4%).
• Bonds: Historically, when stocks are down investors move to bonds. However, for most investors that paradigm did not hold true in 2022, as both stocks and bonds suffered double-digit losses. The Bloomberg (formerly, Barclays/Lehman) Aggregate Bond Index realized the worst return in its history after declining nearly 13.0%. The yield on 10-year Treasuries rose by more than 230 basis points, as bond prices sank (bond prices and yields move in opposite directions). The U.S. Treasury yield curve (the difference between short-term bond interest rates and long-term rates) has been inverted for much of the year. Currently, the difference between the 3-month bond and the 10-year bond is roughly -0.65%, indicating an inverted yield curve. Historically, an inverted yield curve has often signaled a recession. However, other economic indicators seem to indicate that a full-blown recession is unlikely.

• Oil: Crude oil prices rode a wave of volatility throughout 2022. An energy crisis, rising demand, and the Russian invasion of Ukraine sent prices soaring, hitting a high of more than $122.00 per barrel in early June. However, demand waned, particularly in China, where COVID-related lockdowns stifled requirements for crude oil. Crude oil prices were also driven lower by additional U.S. output, including the release of crude oil from the Strategic Petroleum Reserve. By the end of the year, crude oil prices rose by about 7.0%.
• Prices at the pump climbed higher to begin the year. However, as crude oil prices declined, so did retail gasoline prices. The national average retail price for regular gasoline was $3.281 per gallon to begin 2022. Gas prices steadily increased throughout the first half of the year, reaching a high of $5.006 in June. Gas prices trended lower for the remainder of 2022, closing out the year at $3.091 per gallon for the week ended December 26.
• FOMC/interest rates: The target range for the federal funds rate began the year at 0.00%-0.25% and ended 2022 at 4.25%-4.50%, an increase of 425 basis points. Inflation began to climb in 2021, as strong consumer demand collided with pandemic-related supply constraints, which drove prices up, reaching a 39-year high in November 2021. The Fed initially termed the rapid rise in prices “transitory,” expecting that the factors driving inflation upward would subside. However, inflationary pressures did just the opposite for much of 2022, particularly following the Russian invasion of Ukraine in February. In an effort to combat rising inflation, the Fed began hiking the federal funds target range. The first rate hike came in March (25 basis points), followed by four consecutive 75-basis point interest-rate increases. At its last meeting of 2022 in December, the Fed announced a 50-basis point rate hike. Following its last meeting in December, the Fed’s economic projections showed the personal consumption expenditures price to end 2022 at 5.6%, with prices not anticipated to settle at or near the Fed’s target goal of 2.0% until 2025.
• US Dollar-DXY: Since June, the value of the U.S. dollar has been increasing relative to most foreign currencies, particularly the British pound and the Euro. Despite slipping at the end of the year, the dollar remained on track for its biggest annual gain since 2015. In 2022, the dollar has gained about 8.5% against a basket of currencies. The aggressive policy adopted by the Fed to combat rising inflation sent the dollar soaring, reaching a high of about 18.0% in September. The expectation that the Fed will be less hawkish in 2023 has cut into the dollar’s value during the last quarter of 2022.
• Gold: Gold prices began the year at $1,830.30 and closed 2022 at $1,829.70, a decrease of about 0.3%. During the first quarter of 2022, gold prices spiked to $2,053.00 per ounce, following the start of the Russia/Ukraine war. However, by the end of the first quarter, gold prices settled in the $1,930.00 per ounce range. By the third quarter, weakness in the stock market coupled with a surging dollar sent gold prices down to a 30-month low of $1,691.00 per ounce. For the remainder of the year, gold prices hovered between $1,750.00 and $1,800.00 per ounce.

Last Month’s Economic News

• Employment: Job growth remained strong in November with the addition of 263,000 new jobs after adding 284,000 (revised) new jobs in October. Monthly job growth has averaged 392,000 thus far in 2022, compared with 562,000 per month in 2021. Despite federal interest-rate hikes aimed at slowing the economy and inflation, there is little evidence that the supply of labor is peaking. In November, the unemployment rate was unchanged at 3.7% and has remained in the range of 3.5%-3.7% since March. The number of unemployed persons was essentially unchanged at 6.0 million. Both the unemployment rate and the number of unemployed persons are in line with their levels prior to the coronavirus pandemic (3.5% and 5.7 million, respectively, in February 2020). Among the unemployed, the number of workers who permanently lost their jobs rose by 127,000 to 1.4 million in November (1.9 million in November 2021). The labor force participation rate dipped 0.1 percentage point to 62.1% in November (61.9% a year earlier). The employment-population ratio decreased by 0.1 percentage point to 59.9% in November (59.5% in November 2021). In November, average hourly earnings increased by $0.18 to $32.82. Over the past 12 months ended in November, average hourly earnings rose by 5.1% (average hourly earnings in November 2021 were $31.23). The average workweek decreased by 0.1 hour to 34.4 hours in November, down from 34.8 hours in November 2021.
• There were 225,000 initial claims for unemployment insurance for the week ended December 24, 2022. During the same period, the total number of workers receiving unemployment insurance was 1,710,000. Over the course of the year, initial weekly claims moved up and down, but generally remained within a range of 166,000-261,000. By comparison, there were 211,000 initial claims for unemployment insurance for the week ended December 25, and the total number of claims paid was 1,805,000.
• FOMC/interest rates: The Federal Open Market Committee met in December and increased the target range for the federal funds rate 50 basis points to 4.25%-4.50%. In support of its decision, the FOMC noted that inflation levels remain elevated due to supply and demand imbalances related to the pandemic, higher food and energy prices, broader price pressures, and the ongoing Russia/Ukraine war.

• GDP/budget: The economy, as measured by gross domestic product, accelerated at an annual rate of 3.2% in the third quarter. GDP declined in the first and second quarters, 1.6% and 0.6%, respectively. Consumer spending, as measured by the personal consumption expenditures index, rose 2.3% in the third quarter, marginally higher than in the second quarter (2.0%) and the first quarter (1.3%). Spending on services rose 3.7% in the third quarter compared with a 4.6% increase in the second quarter. Consumer spending on goods actually decreased 0.4% in the third quarter. Fixed investment fell 3.5% in the third quarter (-5.0% in the second quarter), pulled lower by a 27.1% drop in residential fixed investment. Nonresidential (business) fixed investment rose 6.2% in the third quarter. Exports rose 14.6% in the third quarter, compared with a 13.8% increase in the previous quarter. Imports, which are a negative in the calculation of GDP, fell 7.3% in the third quarter, after advancing 2.2% in the second quarter. Consumer prices increased 4.3% in the third quarter (6.5% in the second quarter). Excluding food and energy, consumer prices advanced 4.6% in the third quarter (7.1% in the second quarter).
• November saw the federal budget deficit come in at $248.5 billion, up roughly 30.0% from the November 2021 deficit. The deficit for the first two months of fiscal year 2023, at $336.4, is $20.0 billion lower than the first two months of the previous fiscal year. For fiscal year 2022, which runs through September 2022, the government deficit was $1.4 trillion, which was $1.4 trillion lower than the government deficit for fiscal year 2021. For fiscal year 2022, government outlays declined $550.0 billion, while government receipts increased $850.1 billion. Individual income tax receipts rose by $587.8 billion, and corporate income tax receipts increased by $53.0 million.

• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income and disposable personal income rose 0.4% in November after increasing 0.7% in October. Consumer spending advanced 0.1% in November after increasing 0.9% the previous month. Consumer prices inched up 0.1% in November after advancing 0.4% in October. Consumer prices have risen 5.5% since November 2021.
• The Consumer Price Index for November may offer more evidence that inflation may be peaking. The CPI rose 0.1% after advancing 0.4% in October. Over the 12 months ended in November, the CPI rose 7.1%, down from 7.7% in October, falling to its lowest 12-month advance since December 2021. Excluding food and energy prices, the CPI rose 0.2% in November and 6.0% for the year ended in November. Although energy prices fell 1.6% in November, food prices rose 0.5% and prices for shelter rose 0.6%. For the 12 months ended in November, energy prices increased 13.1% (despite the recent decrease), while food prices rose 10.6% (food at home prices increased 12.0%). New vehicle prices advanced 7.2%, prices for transportation services rose 14.2%, and prices for shelter increased 7.1%.
• Prices that producers receive for goods and services rose 0.3% in November following a 0.2% October jump. Producer prices increased 7.4% for the 12 months ended in November. Producer prices less foods, energy, and trade services rose 0.3% in November, while prices excluding foods and energy increased 0.4%. In November, prices for services increased 0.4%, while prices for goods inched up 0.1%. For the 12 months ended in November, prices less foods, energy, and trade services moved up 4.9%, while prices less foods and energy increased 6.2%.
• Housing: Sales of existing homes decreased 7.7% in November, marking the tenth consecutive monthly decline. Existing home sales dropped 35.4% from November 2021. The median existing-home price was $370,700 in November, lower than the October price of $378,800 but 3.5% higher than the November 2021 price of $358,200. Unsold inventory of existing homes represents a 3.3-month supply at the current sales pace, unchanged from October but well above the 2.1-month supply in November. Sales of existing single-family homes dropped 7.6% in November and have not recorded an increase since January 2022. Over the 12 months ended in November, sales of existing single-family homes are down 35.2%. The median existing single-family home price was $376,700 in November, down from $384,600 in October but higher than the November 2021 price of $365,000.
• New single-family home sales advanced in November, climbing 5.8% and marking the second consecutive monthly increase. However, sales are down 15.3% from November 2021. The median sales price of new single-family houses sold in November was $421,700 ($484,700 in October). The November average sales price was $543,600 ($533,400 in October). The inventory of new single-family homes for sale in November represented a supply of 8.6 months at the current sales pace, down from the October estimate of 9.3 months.

• Manufacturing: Industrial production declined 0.2% in November, following a 0.1% decrease in October. Manufacturing decreased 0.6% in November, mining fell 0.7%, while utilities rose 3.6%. Over the past 12 months, total industrial production in November was 2.5% above its year-earlier reading. Although manufacturing fell in November, it remained 1.2% above its November 2021 rate.
• November saw new orders for durable goods decrease 2.1%, after increasing in each of the previous three months. Durable goods orders advanced 0.7% in October. New orders for durable goods rose 10.5% since November 2021. Excluding transportation, new orders increased 0.2% in November. Excluding defense, new orders decreased 2.6%. Transportation equipment, down following three consecutive monthly increases, led the November decrease, falling 6.3%.

• Imports and exports: Both import and export prices declined in November. Import prices fell 0.6% after decreasing 0.4% in the prior month. Prices for imports have not increased since June 2022. Import prices declined 4.6% from June to November, after rising 8.1% in the first half of 2022. Despite the recent decreases, prices for U.S. imports rose 2.7% over the past year, the smallest 12-month advance since January 2021. Prices for import fuel fell 2.8% in November following a decline of 2.7% in October. Import fuel prices have not recorded a monthly increase since a 5.6% advance in June 2022. Export prices declined 0.3% in November and have not recorded a 1-month increase since rising 1.1% in June 2022. Prices for exports advanced 6.3% from November 2021 to November 2022, the smallest 12-month increase since February 2021.
• The international trade in goods deficit was $83.3 billion in November, down $15.5 billion, or 15.6%, from October. Exports of goods were $168.9 billion in November, $5.3 billion less than in October. Imports of goods were $252.2 billion in November, $20.8 billion less than in October. The November drop in exports was widespread, with only automotive vehicles and consumer goods increasing. Each category of imports decreased, led by consumer goods (-13.0%), automotive vehicles (-8.9%), and industrial supplies (-6.0%).
• The latest information on international trade in goods and services, released December 6, is for October and shows that the goods and services trade deficit was $78.2 billion, an increase of $4.0 billion from the September deficit. October exports were $256.6 billion, 0.7%, less than September exports. October imports were $334.8 billion, 0.6%, more than September imports. Year to date, the goods and services deficit increased $136.9 billion, or 19.1%, from the same period in 2021. Exports increased $415.3 billion, or 19.8%. Imports increased $552.2 billion, or 19.8%.
• International markets: The impact of inflation was felt throughout much of the world. Most countries saw double-digit increases in prices for goods and services during the year. In 2022, the consumer price index advanced 10.0% in Germany, 10.7% in the United Kingdom, 10.1% in the Eurozone, and 6.8% in Canada. Japan (3.8%) and China (1.6%) were not significantly impacted by rising inflation. However, gross domestic product in both Japan (-0.8%) and China (2.8% through the third quarter) retreated from the prior year. Stock markets of several countries were also hit hard. For 2022, the STOXX Europe 600 Index declined 12.4%; the United Kingdom’s FTSE advanced 0.9%; Japan’s Nikkei 225 Index fell 9.4%; and China’s Shanghai Composite Index lost 15.1%.
• Consumer confidence: The Conference Board Consumer Confidence Index® increased in December following two consecutive monthly declines. The index stands at 108.3, up from 101.4 in November. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, rose to 147.2 in December, up from 138.3 in the previous month. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — improved to 82.4 in December from 76.7 in November.

Eye on the Year Ahead

The battle against rising inflation will likely continue to dominate much of the economy and stock market in 2023. If and when the Federal Reserve scales back its aggressive interest-rate hikes, investors might be more inclined to return to equities, particularly tech shares. However, the war in Ukraine and new COVID cases will also have an impact. If nothing else, 2023 should be very interesting.

The Markets (as of market close December 30, 2022)

A late-week surge in dip buying wasn’t enough to save stocks from closing the last week of 2022 in the red. Only the Russell 2000 and the Global Dow managed to eke out minimal gains. The Nasdaq, S&P 500, and the Dow all ended the week lower. Treasury yields rose, as bond prices fell. The dollar slid lower, but ended the year up over 8.0%. Crude oil prices ended the week up by nearly 1.0%, closing above $80.00 per barrel.

Stocks began the holiday-shortened week mostly lower, with only the Dow and the Global Dow ticking up 0.1%. The tech-heavy Nasdaq fell 1.4%, while the Russell 2000 (-0.7%) and the S&P 500 (-0.4%) edged lower. Ten-year Treasury yields added 10.9 basis points to close at 3.86%. Crude oil prices were flat, hovering around $79.72 per barrel. The dollar dipped lower, while gold prices rose nearly 1.0%, jumping to their highest level in six months. The Friday before Christmas marked the start of the so-called Santa Clause rally period, which includes the last five trading days of the outgoing year and the first two trading days of the new year. On average, this period has historically produced positive results for stocks. However, poor returns are often seen as a negative indicator.

Equities continued their tailspin last Wednesday, dampening hopes for a year-end rally. The S&P 500 fell to its lowest level since November as fears of rising COVID cases followed the end of China’s lockdown. Several countries, including the United States, will require COVID testing for all air passengers originating from China. The Russell 2000 (-1.6%) and the Nasdaq (-1.4%) led the declining indexes, followed by the S&P 500 (-1.2%), the Dow (-1.1%), and the Global Dow (-0.8%). Bond prices slipped lower, driving yields higher with 10-year Treasury yields climbing to 3.88%. Crude oil prices fell by nearly $1.00, reaching $78.64 per barrel. The dollar advanced, while gold prices declined.

Stock and bond prices rose in a late-day rally last Thursday. The S&P 500 notched its largest gain of December, and the tech-heavy Nasdaq also outperformed. Overall, each of the benchmark indexes listed here posted solid gains, with the Nasdaq and the Russell 2000 advancing 2.6% to lead the charge. The S&P 500 added 1.8%, the Dow and the Global Dow climbed 1.0%. Ten-year Treasury yields fell 5.2 basis points to 3.70%. Crude oil prices moved little from the previous day, closing at around $78.67 per barrel. The dollar dipped, while gold prices advanced.

Wall Street closed 2022 on a downbeat, closing out the worst year in more than a decade. Each of the benchmark indexes listed here ended last Friday in the red, led by the Russell 2000 and the S&P 500, which fell 0.3%. The Dow and the Global Dow dipped 0.2%, while the Nasdaq slipped 0.1%. Ten-year Treasury yields added 4.4 basis points to close the week at 3.87%. Crude oil prices advanced 2.5% to reach $80.41 per barrel. The dollar declined, while gold prices advanced.

Stock Market Indexes

Market/Index	2021 Close	Prior Week	As of 12/30	Weekly Change	YTD Change
DJIA	36,338.30	33,203.93	33,147.25	-0.17%	-8.78%
Nasdaq	15,644.97	10,497.86	10,466.48	-0.30%	-33.10%
S&P 500	4,766.18	3,844.82	3,839.50	-0.14%	-19.44%
Russell 2000	2,245.31	1,760.93	1,761.25	0.02%	-21.56%
Global Dow	4,137.63	3,693.09	3,702.71	0.26%	-10.51%
Fed. Funds target rate	0.00%-0.25%	4.25%-4.50%	4.25%-4.50%	0 bps	425 bps
10-year Treasuries	1.51%	3.75%	3.87%	12 bps	236 bps
US Dollar-DXY	95.64	104.33	103.48	-0.81%	8.20%
Crude Oil-CL=F	$75.44	$79.65	$80.41	0.95%	6.59%
Gold-GC=F	$1,830.30	$1,805.20	$1,829.70	1.36%	-0.03%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The international trade in goods deficit shrunk $15.5 billion, or 15.6% in November. Exports of goods fell 3.1% and imports of goods declined 7.6%.
• Retail prices for regular gasoline continued to slide last week. According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.091 per gallon on December 26, $0.029 per gallon below the prior week’s price and $0.184 lower than a year ago. Also, as of December 26, the East Coast price decreased $0.047 to $3.071 per gallon; the Gulf Coast price rose $0.043 to $2.684 per gallon; the Midwest price declined $0.012 to $2.899 per gallon; the West Coast price dropped $0.073 to $3.910 per gallon; and the Rocky Mountain price decreased $0.084 to $3.002 per gallon. Residential heating oil prices averaged $4.639 per gallon on December 26, $0.042 above the previous week’s price and $1.273 per gallon more than a year ago.
• For the week ended December 24, there were 225,000 new claims for unemployment insurance, an increase of 9,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 17 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 17 was 1,710,000, an increase of 41,000 from the previous week’s level, which was revised down by 3,000. States and territories with the highest insured unemployment rates for the week ended December 10 were Alaska (2.3%), California (2.1%), New Jersey (2.1%), Puerto Rico (2.0%), Montana (1.8%), Minnesota (1.8%), Rhode Island (1.7%), New York (1.6%), Massachusetts (1.6%), and Washington (1.6%). The largest increases in initial claims for unemployment insurance for the week ended December 17 were in Massachusetts (+1,505), New Jersey (+1,258), Missouri (+1,040), Rhode Island (+522), and Pennsylvania (+460), while the largest decreases were in California (-2,268), Ohio (-1,806), Texas (-941), Georgia (-760), and Washington (-704).

Eye on the Week Ahead

The first week of 2023 includes some important economic data for the last month of 2022. The purchasing managers’ indexes for manufacturing and services are available this week. November saw the PMIs for both manufacturing and services contract. The employment figures for December are available at the end of the week. The employment sector remained strong in November, with over 260,000 new jobs added and hourly earnings increasing 0.6% from the previous month.