Tag: federal-reserve

The Markets (as of market close December 5, 2025)

The stock market was largely driven by mixed labor data and optimism over a possible interest rate cut following the Federal Reserve’s meeting next week. Each of the benchmark indexes listed here ended last week higher, with AI stocks playing a significant role. The NASDAQ and small caps of the Russell 2000 led the way, while the S&P 500 approached a new record high. Information technology, energy, and consumer discretionary outperformed among the market sectors, while health care and utilities lagged. Bonds experienced a challenging week, with Treasury yields climbing over 10 basis points, as a selloff in bonds resulted in a drop in price. The latest inflation data (see below) showed consumer prices were up 0.8 percentage point over the Fed’s 2.0% target. Crude oil prices ticked up as concerns about global oversupply were offset somewhat by ongoing geopolitical tensions and the expectation for a rate cut by the Federal Reserve.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 12/5	Weekly Change	YTD Change
DJIA	42,544.22	47,716.42	47,954.99	0.50%	12.72%
NASDAQ	19,310.79	23,365.69	23,578.13	0.91%	22.10%
S&P 500	5,881.63	6,849.09	6,870.40	0.31%	16.81%
Russell 2000	2,230.16	2,498.78	2,521.48	0.91%	13.06%
Global Dow	4,863.01	6,059.46	6,089.50	0.50%	25.22%
fed. funds target rate	4.25%-4.50%	3.75%-4.00%	3.75%-4.00%	0 bps	-50 bps
10-year Treasuries	4.57%	4.02%	4.13%	11 bps	-44 bps
US Dollar-DXY	108.44	99.47	98.99	-0.48%	-8.71%
Crude Oil-CL=F	$71.76	$59.47	$60.17	1.18%	-16.15%
Gold-GC=F	$2,638.50	$4,249.90	$4,225.50	-0.57%	60.15%

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

• According to the latest report from the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index, the preferred measure of inflation of the Federal Reserve, rose 0.3% in September and 2.8% over the last 12 months. Core prices, excluding food and energy, rose 0.2% in September and 2.8% since September 2024. The Personal Consumption Expenditures index, a measure of consumer spending, increased 0.3% in September and 2.1% for the year. Personal income rose 0.4% in September, while disposable (after-tax) personal income increased 0.3%.
• According to the latest survey of purchasing managers by S&P Global, manufacturing accelerated in November but at a slightly slower pace than in the previous month. Nevertheless, November’s increase in operating activity marked the fourth straight month of growth in the manufacturing sector. Survey respondents noted a solid rise in production and a further increase in employment in November, as confidence in the outlook strengthened.
• The services sector continued to expand at a solid pace in November, despite growth softening to a five-month low, according to the latest PMI® survey from S&P Global. Activity was supported by the largest rise in new work so far this year. Confidence in the outlook strengthened following the end of the government shutdown, leading to expectations of improved economic growth in the year ahead.
• Both import and export prices were unchanged in September, according to the latest release from the Bureau of Labor Statistics. Import prices rose 0.3% from September 2024, which was the first 12-month increase since the year ended March 2025. In September, fuel prices declined 1.5%, while nonfuel import prices rose 0.2%. U.S. export prices increased 3.8% over the 12-month period ended in September, the largest over-the-year advance since the year ended December 2022. In September, agricultural exports increased 0.3%, while nonagricultural export prices were unchanged.
• Industrial production (IP) increased 0.1% in September after moving down 0.3% in August. For the third quarter as a whole, IP increased at an annual rate of 1.1%. In September, manufacturing and mining were unchanged from the prior month, while utilities rose 1.1%. Overall, total IP in September was 1.6% above its year-earlier level.
• For the week ended November 29, there were 191,000 new claims for unemployment insurance, a decrease of 27,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since September 24, 2022, when it was 189,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 22 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended November 22 was 1,939,000, a decrease of 4,000 from the previous week’s level, which was revised down by 17,000. States and territories with the highest insured unemployment rates for the week ended November 15 were New Jersey (2.3%), Washington (2.3%), California (2.0%), Massachusetts (2.0%), Puerto Rico (1.9%), the District of Columbia (1.8%), Nevada (1.8%), Rhode Island (1.8%), Alaska (1.7%), Connecticut (1.7%), and Oregon (1.7%). The largest increases in initial claims for unemployment insurance for the week ended November 22 were in California (+7,897), Illinois (+2,845), Pennsylvania (+2,472), Washington (+2,283), and New York (+2,235), while the largest decreases were in Kentucky (-1,107), New Jersey (-385), Kansas (-226), the District of Columbia (-77), and Louisiana (-53).
• The national average retail price for regular gasoline was $2.985 per gallon on December 1, $0.076 per gallon below the prior week’s price and $0.049 per gallon less than a year ago. Also, as of December 1, the East Coast price decreased $0.054 to $2.931 per gallon; the Midwest price fell $0.118 to $2.740 per gallon; the Gulf Coast price dropped $0.092 to $2.551 per gallon; the Rocky Mountain price declined $0.089 to $2.783 per gallon; and the West Coast price fell $0.039 to $4.031 per gallon.

Eye on the Week Ahead

Most of the attention will be focused on the Federal Reserve, which meets this week. It is expected that the Fed will drop the federal funds rate by 25 basis points, which should be good news for Wall Street.

The Markets (as of market close September 19, 2025)

The stock market continued its record-setting run last week with the Dow, the S&P 500, and the NASDAQ each reaching new record highs. The small caps of the Russell 2000 also hit a new high for the first time in four years, which signaled a broadening of the rally beyond tech stocks. The major impetus for last week’s market performance was the Federal Reserve’s decision to trim interest rates (see below) for the first time this year. In addition, the Fed projects that more rate cuts are possible before the end of this year, which investors view as a positive for economic growth and corporate earnings. While inflation appears to have moderated somewhat, the Fed’s challenge is to support a cooling job market without reigniting inflationary pressures. The interest rate cut also influenced the bond market, with 10-year Treasury yields ticking higher as bond prices declined. Crude oil prices fell on concerns about waning global demand, abundant supplies, and implications from the aforementioned interest rate cut.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 9/19	Weekly Change	YTD Change
DJIA	42,544.22	45,834.22	46,315.27	1.05%	8.86%
NASDAQ	19,310.79	22,141.10	22,631.48	2.21%	17.20%
S&P 500	5,881.63	6,584.29	6,664.36	1.22%	13.31%
Russell 2000	2,230.16	2,397.06	2,448.77	2.16%	9.80%
Global Dow	4,863.01	5,843.58	5,885.12	0.71%	21.02%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.00%-4.25%	-25 bps	-25 bps
10-year Treasuries	4.57%	4.06%	4.13%	7 bps	-44 bps
US Dollar-DXY	108.44	97.63	97.67	0.04%	-9.93%
Crude Oil-CL=F	$71.76	$62.58	$62.38	-0.32%	-13.07%
Gold-GC=F	$2,638.50	$3,680.50	$3,716.00	0.96%	40.84%

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

• As expected, the Federal Open Market Committee cut the federal funds rate by 25 basis points, bringing the range to 4.00%-4.25%. This reduction is the first since December and was nearly unanimous, with newly appointed Governor Stephen Miran favoring a 50-basis-point decrease. In reaching its decision, the Fed noted that growth of economic activity moderated in the first half of the year, while job gains have slowed and the unemployment rate edged up but remained low. Inflation remained somewhat elevated. The Committee indicated that uncertainty about the economic outlook remained heightened, while the downside risks to employment have risen. The Fed expects to lower interest rates by another 50 basis points by the end of 2025 and by 25 basis points in 2026, slightly more than projected in June.
• Estimates of U.S. retail and food services sales for August rose 0.6% from the previous month and climbed 5.0% from August 2024. Retail sales for July were revised up 0.1 percentage point to 0.6%. Retail trade sales were up 0.6% from July 2025 and 4.8% from last year. Nonstore (online) retailer sales were up 2.0% in August from the previous month and 10.1% from last year. Sales at food services and drinking places increased 0.7% last month and 6.5% from August 2024.
• Both import and export prices exceeded expectations last month. U.S. import prices advanced 0.3% in August following a 0.2% increase in July. Prices for U.S. imports were unchanged from August 2024 to August 2025. A 0.8% decline in import fuel prices was offset by a 0.4% rise in nonfuel import prices, which was the largest monthly increase since April 2024. Prices for U.S. exports increased 0.3% in August after rising 0.3% the previous month. Higher prices for nonagricultural exports drove the increase. U.S. export prices rose 3.4% over the 12-month period ended in August, the largest 12-month increase since the comparable period ended December 2022.
• Industrial production (IP) ticked up 0.1% in August after decreasing 0.4% in July. Manufacturing output rose 0.2% last month after edging down 0.1% in July. Within manufacturing, the production of motor vehicles and parts increased 2.6%, while factory output rose 0.1%. Mining moved up 0.9%, while utilities decreased 2.0%. Over the last 12 months, total industrial production has risen 0.9%.
• The number of residential building permits issued in August was 3.7% less than the July estimate and 11.1% below the August 2024 rate. Issued building permits for single-family homes fell 2.2% in August from the prior month. Residential housing starts in August were 8.5% below the July estimate and 6.0% less than the August 2024 rate. Single-family housing starts in August were 7.0% under the July figure. Residential housing completions in August were 8.4% above the July estimate but 8.4% below the August 2024 rate. Single-family housing completions in August were 6.7% above the July estimate.
• The national average retail price for regular gasoline was $3.168 per gallon on September 15, $0.024 per gallon below the prior week’s price and $0.012 per gallon less than a year ago. Also, as of September 15, the East Coast price decreased $0.047 to $3.016 per gallon; the Midwest price declined $0.074 to $2.981 per gallon; the Gulf Coast price increased $0.041 to $2.774 per gallon; the Rocky Mountain price fell $0.060 to $3.180 per gallon; and the West Coast price rose $0.079 to $4.273 per gallon.
• For the week ended September 13, there were 231,000 new claims for unemployment insurance, a decrease of 33,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 6 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 6 was 1,920,000, a decrease of 7,000 from the previous week’s level, which was revised down by 12,000. States and territories with the highest insured unemployment rates for the week ended August 30 were New Jersey (2.7%), Rhode Island (2.1%), California (2.0%), Massachusetts (2.0%), Washington (2.0%), Puerto Rico (1.9%), the District of Columbia (1.8%), Minnesota (1.8%), Nevada (1.7%), New York (1.7%), and Oregon (1.7%). The largest increases in initial claims for unemployment insurance for the week ended September 6 were in Texas (+15,346), Michigan (+3,018), Connecticut (+1,454), North Dakota (+684), and Minnesota (+325), while the largest decreases were in New York (-3,623), Tennessee (-2,994), California (-1,702), Illinois (-1,063), and Massachusetts (-830).

Eye on the Week Ahead

There’s plenty of economic data available this week covering several sectors. The latest information on sales of existing and new homes is out this week. The final estimate for the second quarter gross domestic product is also available later in the week. Data on inflation closes out the week with the release of the personal consumption expenditures price index for August.

The Markets (as of market close August 22, 2025)

Last week was a volatile one for stocks, largely in response to mixed economic data, corporate earnings reports, and the anticipation of a key speech from Federal Reserve Chair Jerome Powell at the end of the week. The benchmark indexes listed here ebbed and flowed for much of the week until last Friday, when equities surged after Powell hinted at a likely interest rate cut in September. The S&P 500, the Russell 2000, and the Global Dow each posted weekly gains, with the Dow reaching a record high last Friday. The NASDAQ ended the week in the red despite an end-of-week rally. Treasury yields edged higher earlier in the week, but the prospects of an interest rate cut pulled yields lower by week’s end. Crude oil prices posted their first weekly gain after falling in each of the past two weeks.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 8/22	Weekly Change	YTD Change
DJIA	42,544.22	44,946.12	45,631.74	1.53%	7.26%
NASDAQ	19,310.79	21,622.98	21,496.54	-0.58%	11.32%
S&P 500	5,881.63	6,449.80	6,466.91	0.27%	9.95%
Russell 2000	2,230.16	2,286.52	2,361.95	3.30%	5.91%
Global Dow	4,863.01	5,724.32	5,781.00	0.99%	18.88%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.32%	4.26%	-6 bps	-31 bps
US Dollar-DXY	108.44	97.86	97.72	-0.14%	-9.89%
Crude Oil-CL=F	$71.76	$63.12	$63.76	1.01%	-11.15%
Gold-GC=F	$2,638.50	$3,382.00	$3,417.00	1.03%	29.51%

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 number of issued residential building permits fell 2.8% in July and was down 5.7% from July 2024. The number of single-family building permits in July was 0.5% above the June estimate. Housing starts in July were 5.2% above the revised June estimate and 12.9% higher than the July 2024 rate. Single-family housing starts in July were 2.8% above the revised June estimate. The number of housing completions in July was 6.0% above the revised June estimate but was 13.5% below the July 2024 rate. Single-family housing completions in July were 11.6% above the revised June figure.
• Sales of existing homes rose 2.0% in July, reflecting a slight improvement in housing affordability. Existing home sales were up 0.8% from July 2024. Inventory of existing homes ticked down from a supply of 4.7 months in June to 4.6 months last month. The median existing-home price was $422,400 in July, down from $432,700 in June but 0.2% above the July 2024 estimate of $421,400. Sales of existing single-family homes also rose 2.0% in July and were up 1.1% over the last 12 months. The median existing single-family home price was $428,500 in July, lower than the June estimate of $438,600 but higher than the July 2024 figure of $427,200. Inventory of existing single-family homes in July sat at a 4.5-month supply.
• The national average retail price for regular gasoline was $3.125 per gallon on August 18, $0.007 per gallon above the prior week’s price but $0.257 per gallon less than a year ago. Also, as of August 18, the East Coast price decreased $0.008 to $2.997 per gallon; the Midwest price fell $0.003 to $2.994 per gallon; the Gulf Coast price rose $0.065 to $2.745 per gallon; the Rocky Mountain price increased $0.005 to $3.164 per gallon; and the West Coast price rose $0.012 to $4.044 per gallon.
• For the week ended August 16, there were 235,000 new claims for unemployment insurance, an increase of 11,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended August 9 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 9 was 1,972,000, an increase of 30,000 from the previous week’s level, which was revised down by 11,000. This was the highest level for insured unemployment since November 6, 2021, when it was 2,041,000. States and territories with the highest insured unemployment rates for the week ended August 2 were New Jersey (2.7%), Puerto Rico (2.6%), Rhode Island (2.5%), Minnesota (2.2%), California (2.1%), the District of Columbia (2.1%), Massachusetts (2.1%), Washington (2.1%), Oregon (1.9%), and Pennsylvania (1.9%). The largest increases in initial claims for unemployment insurance for the week ended August 9 were in California (+741), New York (+630), Rhode Island (+570), Michigan (+527), and Maryland (+343), while the largest decreases were in Iowa (-704), Illinois (-334), New Jersey (-251), Pennsylvania (-158), and Oregon (-153).

Eye on the Week Ahead

This week reveals the second iteration of gross domestic product for the second quarter. The initial estimate of GDP had the economy growing at a rate of 3.0%. Also out this week is the July report on personal income and expenditures. Included in that report are the estimates of consumer spending and prices for consumer goods, the Federal Reserve’s preferred measure of inflation.

The Markets (as of market close June 20, 2025)

Stocks closed the week with mixed results as investors weighed the escalating tensions in the Middle East against the likelihood of the Federal Reserve cutting interest rates amidst an apparent disagreement between Federal Reserve governors. The Dow, the NASDAQ, and the Russell 2000 closed the week higher, while the S&P 500 and the Global Dow ended the week in the red. Information technology and energy were the only market sectors to finish the week higher. Health care fell by more than 2.5%. Crude oil prices rose for the third straight week as heightened tensions between Iran and Israel threatened supply disruptions, although Iran continued to export crude oil, reaching its highest level in five weeks. Gold prices marked their first decline in the last three weeks. Long-term bond prices climbed on increased demand, pulling yields lower.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 6/20	Weekly Change	YTD Change
DJIA	42,544.22	42,197.79	42,206.82	0.02%	-0.79%
NASDAQ	19,310.79	19,406.83	19,447.41	0.21%	0.71%
S&P 500	5,881.63	5,976.97	5,967.84	-0.15%	1.47%
Russell 2000	2,230.16	2,100.51	2,109.27	0.42%	-5.42%
Global Dow	4,863.01	5,377.25	5,339.42	-0.70%	9.80%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.42%	4.37%	-5 bps	-20 bps
US Dollar-DXY	108.44	98.18	98.82	0.65%	-8.87%
Crude Oil-CL=F	$71.76	$73.34	$75.00	2.26%	4.52%
Gold-GC=F	$2,638.50	$3,452.40	$3,383.40	-2.00%	28.23%

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 Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 4.25%-4.50% following its meeting last week. In reaching its decision, the Committee noted that economic activity has continued to expand at a solid pace, although swings in net exports have affected the data. The unemployment rate remained low and labor market conditions continued to be solid, while inflation was somewhat elevated. The FOMC observed that uncertainty about the economic outlook had diminished but remained prevalent. The Committee’s summary of economic conditions projects two rate cuts of 25 basis points each by the end of 2025. The FOMC next meets on July 30.
• Retail sales fell 0.9% in May from the previous month but were 3.3% above the May 2024 estimate. Retail trade sales were down 0.9% last month but were up 3.0% from last year. Nonstore (online) retail sales climbed 0.9% in May and advanced 8.3% from last year, while sales at food service and drinking places fell 0.9% in May but rose 5.3% from May 2024.
• Prices for imports were unchanged in May following an advance of 0.1% in April. Import prices rose 0.2% from May 2024. Import fuel prices declined 4.0% in May, the largest monthly decline since September 2024. Prices for nonfuel imports advanced 0.3% in May and rose 1.7% over the last 12 months. Prices for exports decreased 0.9% in May, the largest one-month decline since October 2023. Despite the May decline, export prices increased 1.7% from May 2024 to May 2025.
• Industrial production (IP) fell 0.2% in May after increasing 0.1% in April. Manufacturing output ticked up 0.1% in May, driven by a 4.9% gain in motor vehicles and parts. Manufacturing excluding motor vehicles and parts fell 0.3%. Mining increased 0.1% last month, while utilities decreased 2.9%. Total IP in May was 0.6% above its year-earlier level.
• Building permits issued for privately-owned homes in May were 2.0% below the April rate and 1.0% under the May 2024 estimate. Issued building permits for single-family homes in May were 2.7% below the April total. Privately-owned housing starts in May were 9.8% below the April estimate and 4.6% less than May 2024. The drop in housing starts in May marked the lowest level since May 2020. Single-family housing starts in May were 0.4% above the April approximation. Privately-owned housing completions in May were 5.4% above the April estimate but 2.2% below the May 2024 figure. Single-family housing completions in May were 8.1% above the April rate.
• The national average retail price for regular gasoline was $3.139 per gallon on June 16, $0.031 per gallon above the prior week’s price but $0.296 per gallon less than a year ago. Also, as of June 16, the East Coast price increased $0.034 to $2.983 per gallon; the Midwest price climbed $0.060 to $3.026 per gallon; the Gulf Coast price increased $0.019 to $2.735 per gallon; the Rocky Mountain price rose $0.029 to $3.114 per gallon; and the West Coast price declined $0.027 to $4.127 per gallon.
• For the week ended June 14, there were 245,000 new claims for unemployment insurance, a decrease of 5,000 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 June 7 was 1.3%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended June 7 was 1,945,000, a decrease of 6,000 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 May 31 were New Jersey (2.3%), California (2.2%), Massachusetts (2.1%), Washington (2.1%), Rhode Island (2.0%), the District of Columbia (1.9%), Nevada (1.7%), Puerto Rico (1.7%), Illinois (1.6%), and New York (1.6%). The largest increases in initial claims for unemployment insurance for the week ended June 7 were in California (+8,930), Minnesota (+4,809), Pennsylvania (+3,939), Texas (+3,355), and Florida (+3,088), while the largest decreases were in Kentucky (-4,249), North Dakota (-980), Tennessee (-693), Mississippi (-273), and Kansas (-178).

Eye on the Week Ahead

This week is loaded with important, potentially market-moving economic data. The latest data on sales of new and existing homes is available at the beginning of the week. The final estimate of gross domestic product for the first quarter is released midweek. The week ends with the release of the latest data covering personal income, consumer spending, and consumer prices.

The Markets (as of market close April 30, 2025)

Wall Street in April generally ebbed and flowed in response to uncertainty over U.S. trade policy and the impact of tariffs. April got off to a very rocky start as the stock market endured its worst week since the COVID pandemic. Investors moved away from risk following the announcement of President Trump’s sweeping tariffs, particularly those aimed at China, and that country’s immediate retaliatory response, which raised fears of rising inflation and global economic recession. Wall Street rebounded the following week after President Trump announced a 90-day pause on many of his new tariffs. Investors were then hit with President Trump’s threat to fire Federal Reserve Chair Jerome Powell, which resulted in another negative week for the markets. Toward the end of April, Wall Street settled into a wait-and-see mode, which resulted in moderate gains as investors remained alert to further developments. However, contraction of the U.S. economy for the first time in three years (see below) drove stocks mostly lower to close out the month. The market sectors ended April mixed, with consumer staples and information technology outperforming, while energy, financials, real estate, materials, and health care declined.

The latest inflation data was encouraging: however, it does not reflect the potential impact of global reciprocal tariffs. Both the personal consumption expenditures (PCE) price index and the Consumer Price Index declined over the 12 months ended in March. Energy prices were a large contributor to the decline in overall consumer prices.

Growth of the U.S. economy was muted in March. The gross domestic product (GDP) fell 0.3% in the first quarter following a 2.4% increase in the fourth quarter (see below). Net exports cut into GDP as imports jumped nearly 40% primarily due to businesses and consumers stockpiling goods in advance of potential tariff-driven price increases. Consumer spending rose 1.8%, the weakest increase since mid-2023. For 2024, GDP rose 2.8%, 0.1 percentage point less than the 2023 rate.

Job growth exceeded expectations in March, although the unemployment rate ticked higher. Wages rose 3.8% over the past 12 months. The number of job openings fell by 288,000 in March to 7.2 million, which was the lowest total in six months and well below expectations. However, this data does not reflect the layoffs and cuts sanctioned by the Trump administration. The latest unemployment data showed total claims paid in mid-April increased by more than 100,000 from a year earlier (see below).

According to FactSet, despite concerns in the market about tariffs and higher costs, the S&P 500 reported earnings growth of 12.4% thus far in the first quarter, which is lower than the prior quarter’s net profit margin but above the net profit margin from a year ago and higher than the five-year average of 11.7%. While first-quarter reporting is not complete, if the current data remains consistent, this will mark the fourth straight quarter of net profit margins above 12%. Among the sectors, six sectors have reported a year-over-year increase in net profit margins in the first quarter, led by communication services and health care. Conversely, the energy sector has reported the largest year-over-year decline in earnings of all 11 sectors. A drop in oil prices has contributed to the decrease in earnings for this sector.

The real estate market had mixed results in March, with sales of existing homes falling, while new home sales rose. Mortgage rates decreased somewhat but remained elevated. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.81% as of April 24. That’s down from 6.83% one week before and down from 7.2% one year ago. Over the last few months, rates for 30-year fixed mortgages have remained stable and have fluctuated less than 20 basis points over that time.

Industrial production slowed in March but rose over the last 12 months. Manufacturing output, utilities, and mining each increased since March 2024. Purchasing managers reported manufacturing slowed in March, while services expanded.

Ten-year Treasury yields closed the month lower due to concerns that tariffs and government spending cuts may hurt the economy. The two-year note closed April at about 3.6%, down 28 basis points from a month earlier. The dollar index dipped lower from a month earlier, as it hovered around a three-year low of 98.3. Gold prices rose in April, marking its fourth straight monthly gain. Crude oil prices declined to their lowest levels since April 2021 as trade policy uncertainty weighed on demand. The retail price of regular gasoline was $3.133 per gallon on April 28, $0.029 below the price a month earlier and $0.520 lower than the price a year ago.

Stock Market Indexes

Market/Index	2024 Close	Prior Month	As of 4/30	Monthly Change	YTD Change
DJIA	42,544.22	42,001.76	40,669.36	-3.17%	-4.41%
NASDAQ	19,310.79	17,299.29	17,446.34	0.85%	-9.65%
S&P 500	5,881.63	5,611.85	5,569.06	-0.76%	-5.31%
Russell 2000	2,230.16	2,011.01	1,964.12	-2.33%	-11.93%
Global Dow	4,863.01	5,106.01	5,089.85	-0.32%	4.66%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.24%	4.17%	-36 bps	-37 bps
US Dollar-DXY	108.44	104.19	99.69	-4.32%	-8.07%
Crude Oil-CL=F	$71.76	$71.38	$58.32	-18.30%	-18.73%
Gold-GC=F	$2,638.50	$3,156.40	$3,303.50	4.66%	25.20%

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 exceeded expectations in March, with the addition of 228,000 new jobs after a downward revision of 48,000 in the prior two months. In March, the unemployment rate increased 0.1 percentage point to 4.2%. The number of unemployed persons changed little at 7.1 million in March. The number of long-term unemployed (those jobless for 27 weeks or more) was 1.5 million, essentially unchanged from the February figure. These individuals accounted for 21.3% of all unemployed persons. The labor force participation rate in March was 62.5%, up 0.1 percentage point from the previous month. The employment-population ratio was unchanged at 59.9%. Average hourly earnings increased by $0.09, or 0.3%, to $36.00 in March. Over the last 12 months, average hourly earnings rose by 3.8% (4.0% for the 12 months ended in February 2025). The average workweek was unchanged at 34.2 hours.
• There were 222,000 initial claims for unemployment insurance for the week ended April 19, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,841,000. A year ago, there were 209,000 initial claims, while the total number of workers receiving unemployment insurance was 1,776,000.
• FOMC/interest rates: The Federal Open Market Committee did not meet in April. However, President Trump has pushed for the Federal Reserve to lower interest rates. Thus far, Fed Chair Jerome Powell indicated that the current fiscal policy will be maintained until the Committee deems it appropriate to lower rates.
• GDP/budget: The economy, as measured by gross domestic product, decelerated at an annualized rate of 0.3% in the first quarter of 2025 following an increase of 2.4% in the fourth quarter of 2024. Compared to the fourth quarter, the decrease in GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, a decrease in government spending, and a deceleration in consumer spending. These movements were partly offset by increases in investment and exports. Consumer spending, as measured by the personal consumption expenditures index, rose 1.8% in the first quarter, compared to a 4.0% rise in the fourth quarter. Spending on services rose 2.4% in the first quarter, compared with a 3.0% increase in the fourth quarter. Consumer spending on goods increased 0.5% in the first quarter (6.2% in the fourth quarter). Fixed investment increased 7.8% in the first quarter after decreasing 1.1% in the fourth quarter. Nonresidential (business) fixed investment rose 9.8% in the first quarter after falling 3.0% in the previous quarter. Residential fixed investment rose 1.3% in the first quarter following a 5.5% increase in the fourth quarter. Exports advanced 1.8% in the first quarter, compared with a 0.2% decline in the previous quarter. Imports vaulted 41.3% in the first quarter after ticking down 1.9% in the fourth quarter.
• March saw the federal budget deficit come in at $161 billion, compared to a deficit of $237 billion a year ago. The deficit for the first six months of fiscal year 2025, at $1,307 billion, is well above the $1,065 billion deficit over the first six months of the previous fiscal year. So far in fiscal year 2025, government receipts totaled $2,260 billion, while government outlays totaled $3,567 billion. Through the first six months of fiscal year 2025, individual income tax receipts added up to $1,144 billion, while outlays for Social Security totaled $775 billion.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income rose 0.5% in March, while disposable personal income also increased 0.5% last month after increasing 0.7% and 0.8%, respectively, in February. Consumer spending increased 0.7% in March after increasing 0.5% the previous month. In March, the PCE price index and the PCE price index less food and energy were each unchanged for the month after rising 0.4% and 0.5%, respectively, in February. Consumer prices rose 2.3% for the 12 months ended in March, down 0.4 percentage point from the same period ended in February. Core prices increased 2.6% over the last 12 months. In March, prices for goods fell 0.5%, while prices for services rose 0.2%. Food prices increased 0.5%, while energy prices fell 2.7%.
• In what could be the calm before the storm, consumer prices slowed in March. The Consumer Price Index fell 0.1% last month after ticking up 0.1% (revised) in February. Over the 12 months ended in March, the CPI rose 2.4%, 0.2 percentage point below the rate for the 12 months ended in February. Core prices (excluding food and energy) inched up 0.1% last month and 2.8% since March 2024. Prices for shelter rose 0.2% in March (and 4.0% for the last 12 months). Food prices increased 0.4% last month after rising 0.2% in February, and 2.6% for the year. Energy prices fell 2.4% in March, pulled lower by a 6.3% decline in gasoline prices.
• Prices at the wholesale level declined 0.4% in March, according to the latest Producer Price Index. Producer prices increased 2.7% for the 12 months ended in March after rising 3.2% for the 12-month period ended in February. Excluding food and energy, producer prices fell 0.1% in March but increased 3.3% for the year. In March, prices for goods declined 0.9% (+0.3% in February) and 0.9% since March 2024 (1.7% for the 12 months ended in February). Last month saw prices for services fall 0.2% after being unchanged in February. Prices for services have risen 3.6% for the 12 months ended in March, a decrease of 0.3 percentage point from the increase over the 12 months ended in February.
• Housing: Sales of existing homes decreased 5.9% in March and were 2.4% under the March 2024 figure. The median existing-home price was $403,700 in March, above the February estimate of $396,800 and higher than the year-earlier price of $392,900. Unsold inventory of existing homes in March represented a 4.0-month supply at the current sales pace, marginally longer than the February supply of 3.5 months and well above the 3.2-month supply in March 2024. Sales of existing single-family homes fell 6.4% in March and were 3.2% below the estimate from a year earlier. The median existing single-family home price was $408,000 in March ($400,900 in February), above the March 2024 estimate of $396,600.
• New single-family home sales rose 7.4% in March and were 6.0% above the March 2024 figure. The median sales price of new single-family houses sold in March was $403,600 ($411,500 in February), down from the March 2024 estimate of $436,400. The March average sales price was $497,700 ($492,700 in February), down from the March 2024 average sales price of $522,500. Inventory of new single-family homes for sale in March represented a supply of 8.3 months at the current sales pace, down from the February estimate of 8.9 months but above the 8.2-month supply from a year earlier.
• Manufacturing: Industrial production decreased 0.3% in March following a 0.8% advance in February. Manufacturing output gained 0.3% last month after climbing 1.0% in February. In March, mining increased 0.6%, while utilities dropped 5.8%, impacted by unusually warm weather. Over the 12 months ended in March, total industrial production was 1.3% above its year-earlier reading. Since March 2024, manufacturing increased 1.0%, utilities rose 4.4%, while mining increased 1.0%.
• New orders for durable goods increased 9.2% in March, marking the third consecutive monthly gain. For the 12 months ended in March, durable goods orders advanced 5.5%. Excluding transportation, new orders were unchanged last month. Excluding defense, new orders advanced 10.4%. Transportation equipment, which increased 27.0%, rose for the third straight month and led the overall increase in new orders in March.
• Imports and exports: Import prices decreased 0.1% in March following a 0.2% increase in February. The March decline was the first monthly drop since the index decreased 0.4% in September 2024. Prices for imports increased 0.9% from March 2024 to March 2025. Import fuel prices decreased 2.3% in March, which was the largest monthly drop since September 2024. Export prices were unchanged in March after rising 0.5% the previous month. Export prices have not declined on a one-month basis since September 2024. Export prices advanced 2.4% for the 12 months ended March 2025.
• The international trade in goods deficit in March was $162.0 billion, 9.6% more than the February estimate. Exports of goods for March were 1.2% above February exports. Imports of goods for March were 5.0% more than February imports. Over the 12 months ended in March, the goods deficit grew by about 75.0%. Exports rose 6.8%, while imports increased 30.8%.
• The latest information on international trade in goods and services, released April 3, saw the goods and services deficit fall 6.1% in February to $122.7 billion. Exports of goods increased 2.9% to $278.5 billion in February. Imports of goods, at $401.1 billion, were unchanged. For the 12 months ended in February 2025, the goods and services deficit increased $117.1 billion, or 86.0%. Exports increased $24.0 billion, or 4.6%. Imports increased $141.2 billion, or 21.4%.
• International markets: Global markets were largely driven by tariff news throughout April. European and Asian stocks were mostly mixed for much of the month, ultimately closing April largely in the red. Elsewhere, the Ukraine war has depleted the Russian labor force, driving the unemployment rate to 2.3%. While the U.S. GDP declined in the first quarter, Mexico’s GDP unexpectedly grew by 0.6% on a yearly basis. Canada’s GDP also expanded, driven higher by a rise in household consumption expenditures. Eurozone GDP expanded by 0.4% in the first quarter. The Chinese economy grew by 1.2% in the first quarter, and Japan’s GDP rose 0.6%. In April, the STOXX Europe 600 Index fell 1.8%; the United Kingdom’s FTSE declined 1.3%; Japan’s Nikkei 225 Index gained 1.2%; and China’s Shanghai Composite Index ticked down 2.1%.
• Consumer confidence: The Conference Board Consumer Confidence Index® fell by 7.9 points in April to 86.0. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, decreased 0.9 points to 133.5. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, dropped 12.5 points to 54.4, the lowest level since October 2011 and well below the threshold of 80 that usually signals a recession ahead.

Eye on the Month Ahead

Despite the volatility in the stock market, data has shown the economy to be somewhat resilient so far this year. However, trade wars could impact the global economy, which could curtail economic growth moving forward. The Federal Open Market Committee meets during the first full week of May. Fed Chair Jerome Powell has indicated that the Federal Reserve will not make changes to interest rates unless it is in the best interests of the economy to do so, regardless of outside pressures.

The Markets (as of market close March 28, 2025)

Despite getting off to a good start, stocks wavered throughout much of last week, ultimately closing lower. Each of the benchmark indexes lost ground, with the S&P 500 finishing the week lower for the fifth time in the last six weeks after reaching record highs in mid-February. Several negative factors weighed on investors, including hotter-than-expected core consumer prices (see below) and a slowdown in consumer spending. Last Monday saw stocks rise as investors were encouraged by the prospect of the Trump administration selectively imposing tariffs, reducing the likelihood of a full-blown trade war. Both the S&P 500 and the NASDAQ gained again last Tuesday, marking their third consecutive sessions of gains. A tech stock selloff, coupled with mounting tariff concerns, led to a sharp fall in stocks last Wednesday. Crude oil prices rose to $69.90 per barrel, the highest in nearly four weeks, as concerns over tightening global supply drove prices up. Stocks continued to trend lower last Thursday after President Trump announced new tariffs on foreign-made autos, raising concerns of a potential trade war and its broader impact on the global economy. The week ended with equities closing lower, dampened by growing concerns over rising inflation and trade wars. Among the market sectors, only consumer discretionary, consumer staples, and energy closed higher, with information technology dropping 2.1%. Bond yields ended the week where they began. Gold prices ended the week at a record high. The dollar index ended the week lower after reaching a three-week high earlier in the week.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 3/28	Weekly Change	YTD Change
DJIA	42,544.22	41,985.35	41,583.90	-0.96%	-2.26%
NASDAQ	19,310.79	17,784.05	17,322.99	-2.59%	-10.29%
S&P 500	5,881.63	5,667.56	5,580.94	-1.53%	-5.11%
Russell 2000	2,230.16	2,056.98	2,023.27	-1.64%	-9.28%
Global Dow	4,863.01	5,198.52	5,135.73	-1.21%	5.61%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.25%	4.25%	0 bps	-32 bps
US Dollar-DXY	108.44	104.14	103.96	-0.17%	-4.13%
Crude Oil-CL=F	$71.76	$68.29	$69.14	1.24%	-3.65%
Gold-GC=F	$2,638.50	$3,028.10	$3,116.50	2.92%	18.12%

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

• Gross domestic product (GDP) increased at an annual rate of 2.4% in the fourth quarter of 2024, according to the third and final estimate released by the U.S. Bureau of Economic Analysis. In the third quarter, GDP increased 3.1%. The increase in GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. Compared to the third quarter, the decrease in GDP was primarily attributable to downturns in investment and exports, while consumer spending increased from 3.7% in the third quarter to 4.0% in the fourth quarter. For 2024, GDP rose 2.8% from 2023.
• According to the latest information from the Bureau of Economic Analysis, personal income increased 0.8% in February. Disposable personal income (less personal income taxes) rose 0.9% last month. Personal consumption expenditures (PCE), a measure of consumer spending, increased 0.4%. The PCE price index, a preferred measure of inflation for the Federal Reserve, increased 0.3% in February. Excluding food and energy, the PCE price index increased 0.4%. Over the last 12 months, the PCE price index increased 2.5%. Excluding food and energy, the PCE price index rose 2.8% over the past 12 months.
• Sales of new single-family houses in February were 1.8% above the revised January rate and were 5.1% higher than the February 2024 estimate. The median sales price of new houses sold in February was $414,500. The average sales price was $487,100. The estimate of new houses for sale at the end of February represented a supply of 8.9 months at the current sales rate.
• New orders for manufactured durable goods in February, up two consecutive months, increased 0.9%, according to the U.S. Census Bureau. The February increase followed a 3.3% January advance. Excluding transportation, new orders increased 0.7% last month. Excluding defense, new orders increased 0.8%. Transportation equipment, also up two consecutive months, led the increase after rising 1.5%.
• The international trade in goods deficit was $147.9 billion in February, down $7.7 billion, or 4.9%, from January. Exports of goods for February were $178.6 billion, $7.0 billion, or 4.1%, more than January exports. Imports of goods for February were $326.5 billion, $0.6 billion, or 0.2%, less than January imports.
• The national average retail price for regular gasoline was $3.115 per gallon on March 24, $0.057 per gallon above the prior week’s price but $0.408 per gallon less than a year ago. Also, as of March 24, the East Coast price ticked up $0.012 to $2.961 per gallon; the Midwest price increased $0.126 to $3.020 per gallon; the Gulf Coast price advanced $0.111 to $2.740 per gallon; the Rocky Mountain price increased $0.045 to $3.043 per gallon; and the West Coast price dipped $0.006 to $4.055 per gallon.
• For the week ended March 22, there were 224,000 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 March 15 was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended March 15 was 1,856,000, a decrease of 25,000 from the previous week’s level, which was revised down by 11,000. States and territories with the highest insured unemployment rates for the week ended March 8 were Rhode Island (2.9%), New Jersey (2.8%), California (2.4%), Massachusetts (2.4%), Minnesota (2.4%), Illinois (2.3%), Washington (2.3%), Montana (2.1%), District of Columbia (2.0%), Connecticut (1.9%), New York (1.9%), and Pennsylvania (1.9%). The largest increases in initial claims for unemployment insurance for the week ended March 15 were in Michigan (+2,842), Mississippi (+1,775), Texas (+1,458), Nebraska (+395), and Missouri (+206), while the largest decreases were in California (-3,625), Illinois (-1,365), Virginia (-895), Pennsylvania (-877), and New Jersey (-860).

Eye on the Week Ahead

The employment figures for March are out this week. February saw jobs increase by 151,000, while the unemployment rate ticked up to 4.1%.

The Markets (as of market close February 28, 2025)

Wall Street saw stocks tumble mostly lower in February after posting strong returns in January. Investors worried about the economic impact of tariffs, inflation, and rising geopolitical tensions. Consumer staples and real estate stocks moved higher last month, while consumer discretionary, industrials, information technology, communication services, and energy underperformed.

The latest data showed inflation remained elevated. The personal consumption expenditures (PCE) price index has risen from a low of 2.1% for the 12 months ended in September to 2.5% for the same period ended in January, which supports the Federal Open Market Committee’s assessment that inflation “remains somewhat elevated.” Another potential inflationary risk is the impact of looming tariffs threatened by the White House, which gives the Fed ample justification to hold interest rates steady over the next few months.

Growth of the U.S. economy continued at a modest pace. The gross domestic product (GDP) rose 2.3% in the fourth quarter following a 3.1% increase in the third quarter (see below). For 2024, GDP rose 2.8%, 0.1 percentage point less than the 2023 rate. In the fourth quarter, personal consumption expenditures, the largest contributor in the calculation of GDP, rose 4.2% in January. Spending rose 12.1% on durable goods, possibly reflecting consumers’ concerns about future prices and availability of big-ticket imports such as motor vehicles. Spending on nondurables increased 3.0%, while consumer spending on services advanced 3.3%. For 2024, consumer spending rose 2.8%.

Job growth rose by 143,000 in January after averaging a monthly gain of 186,000 in 2024. The unemployment rate remained steady at 4.0%. Wages rose 4.1% over the past 12 months. The number of job openings fell by 556,000 in December (latest information available) to 7.6 million (8.1 million jobs in November), which was below expectations. Job openings were down 548,000 in the private sector and 9,000 in government. However, this data does not reflect the layoffs and cuts sanctioned by the Trump administration. The latest unemployment data showed total claims paid at the end of January increased from a year earlier (see below).

According to FactSet, the S&P 500 reported earnings growth of 17.8% in the fourth quarter, the highest growth since the fourth quarter of 2021. However, during earnings conference calls, 221 of the S&P 500 companies mentioned “tariffs.” The financial sector reported the highest fourth-quarter earnings growth at 56.9%. Of the S&P 500 companies reporting earnings, 77.0% exceeded earnings per share above expectations, equal to the five-year average. However, 72 S&P 500 companies reported a decline in earnings per share.

The real estate sector saw residential sales decline in January. Mortgage rates decreased somewhat but remained elevated. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.76% as of February 27. That’s down from 6.95% one month ago and lower than 6.94% a year ago.

Industrial production expanded for the third consecutive month in January (see below), although manufacturing output slid marginally. Last month saw mining decrease, while utilities increased. Over the last 12 months, industrial production, manufacturing, mining, and utilities increased. Purchasing managers reported manufacturing expanded in January as new orders and output increased. The services sector saw growth continue in January but at a slightly slower pace than in December.

Ten-year Treasury yields closed the month falling to the lowest rate in over two months due to concerns that tariffs and government spending cuts may hurt the economy. The two-year note closed February at 4.00%, down roughly 22.0 basis points from a month earlier. The dollar index dipped lower from a month earlier. Gold prices rose in February, despite trending lower during the latter part of the month. Crude oil prices settled at about $70.00 per barrel, marking the first monthly decline since November 2024. The retail price of regular gasoline was $3.125 per gallon on February 24, $0.022 above the price a month earlier but $0.124 lower than the price a year ago.

Stock Market Indexes

Market/Index	2024 Close	Prior Month	As of 2/28	Monthly Change	YTD Change
DJIA	42,544.22	44,544.66	43,840.91	-1.58%	3.05%
NASDAQ	19,310.79	19,627.44	18,847.27	-3.97%	-2.40%
S&P 500	5,881.63	6,040.53	5,954.50	-1.42%	1.24%
Russell 2000	2,230.16	2,287.69	2,163.06	-5.45%	-3.01%
Global Dow	4,863.01	5,094.27	5,215.57	2.38%	7.25%
fed. funds target rate	4.25%-4.50%	4.25%-4.50%	4.25%-4.50%	0 bps	0 bps
10-year Treasuries	4.57%	4.56%	4.20%	-36 bps	-37 bps
US Dollar-DXY	108.44	108.49	107.56	-0.86%	-1.66%
Crude Oil-CL=F	$71.76	$73.61	$69.95	-4.97%	-2.52%
Gold-GC=F	$2,638.50	$2,833.20	$2,867.30	1.20%	8.69%

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 was slightly below expectations in January, with the addition of 143,000 new jobs after an upward revision of 100,000 new jobs in the prior two months. In January, the unemployment rate decreased 0.1 percentage point to 4.0%. The number of unemployed persons changed little at 6.8 million in January. The number of long-term unemployed (those jobless for 27 weeks or more) was 1.4 million, a decline of about 100,000 from the December figure. These individuals accounted for 21.1% of all unemployed persons. The labor force participation rate in January was 62.6%, up 0.1 percentage point from the previous month. The employment-population ratio increased 0.1 percentage point to 60.1% in January. Average hourly earnings increased by $0.17, or 0.5%, to $35.87 in January. Since January 2024, average hourly earnings rose by 4.1% (3.9% for the 12 months ended in December 2024). The average workweek edged down by 0.1 hour to 34.1 hours in January.
• There were 242,000 initial claims for unemployment insurance for the week ended February 22, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,862,000. A year ago, there were 213,000 initial claims, while the total number of workers receiving unemployment insurance was 1,805,000.
• FOMC/interest rates: The Federal Open Market Committee did not meet in February after maintaining the federal funds rate at the current 4.25%-4.50% following its meeting in January. The Committee next meets during the second week of March.
• GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 2.3% in the fourth quarter following an increase of 3.1% in the third quarter. GDP expanded at an annualized rate of 2.8% in 2024, compared with an annual increase of 2.9% in 2023. Consumer spending, as measured by the PCE index, rose 4.2% in the fourth quarter following a 3.7% rise in the third quarter. Spending on services rose 3.3% in the fourth quarter, compared with a 2.8% increase in the third quarter. Consumer spending on goods increased 6.1% in the fourth quarter (5.6% in the third quarter). Fixed investment declined 1.4% in the fourth quarter after increasing 2.1% in the third quarter. Nonresidential (business) fixed investment declined 3.2% in the fourth quarter after climbing 4.0% in the previous quarter. Residential fixed investment rose 5.4% in the fourth quarter following a 4.3% decrease in the third quarter. Exports fell 0.5% in the fourth quarter, compared with a 9.6% increase in the previous quarter. Imports, which are a negative in the calculation of GDP, also decreased 1.2% in the fourth quarter after rising 10.7% in the third quarter. Consumer prices increased 2.4% in the fourth quarter (1.5% in the third quarter). Excluding food and energy, consumer prices advanced 2.7% in the fourth quarter (2.2% in the third quarter). The increase in GDP in 2024 reflected increases in consumer spending, investment, government spending, and exports, while imports increased. The price index for gross domestic purchases increased 2.4% in 2024, compared with an increase of 3.3% in 2023. The PCE price index increased 2.5% in 2024, compared with an increase of 3.8% in 2023. Excluding food and energy prices, the PCE price index increased 2.8% last year, compared with a 2023 increase of 4.1%.
• January saw the federal budget deficit come in at $129.0 billion, $42.0 billion above the December monthly deficit and $106.0 billion above the January 2024 deficit. The deficit for the first four months of fiscal year 2025, at $840.0 billion, is roughly $300.0 billion higher than the first four months of the previous fiscal year. So far in fiscal year 2025, government receipts totaled $1,596.0 trillion, while government outlays totaled $2,436.0 trillion. Through the first four months of fiscal year 2025, individual income tax receipts added up to $823.0 billion, while outlays for Social Security totaled $502.0 billion.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income and disposable personal income each rose 0.9% in January after both increased 0.4% in December. Consumer spending decreased 0.2% in January after increasing 0.8% the previous month. Consumers spent 29.0% on housing and utilities in January, while spending on motor vehicles and parts fell 41.1%. Consumer prices inched up 0.3% in January, the same increase as in December. Excluding food and energy (core prices), prices rose 0.3% in January. Consumer prices rose 2.5% since January 2024, while core prices increased 2.6%. Over the last 12 months, prices for food rose 1.6%, while energy prices increased 1.0%.
• The Consumer Price Index rose 0.5% in January after ticking up 0.4% in December. Over the 12 months ended in January, the CPI rose 3.0%, 0.1 percentage point above the rate for the 12 months ended in December. Core prices (excluding food and energy) rose 0.4% in January and 3.3% since January 2024. Prices for shelter rose 0.4% in January, accounting for nearly 30.0% of the monthly increase. Energy prices rose 1.1% in January, as gasoline prices increased 1.8%. Prices for food also increased in January, rising 0.4%. Over the last 12 months, food prices rose 2.5%, energy prices increased 1.0%, prices for new vehicles fell 0.3%, while prices for shelter advanced 4.4%.
• Prices that producers received for goods and services (wholesale prices) advanced 0.4% in January following a 0.5% increase in December. Producer prices increased 3.5% for the 12 months ended in January, unchanged from the revised estimate for the 12-month period ended in December. The January increase in producer prices was broad-based, with prices for goods moving up 0.6%, while prices for services increased 0.3%. Producer prices less foods, energy, and trade services edged up 0.3% in January following a 0.4% increase in December. Prices less foods, energy, and trade services rose 3.4% since January 2024 after advancing 3.5% for the 12 months ended in December.
• Housing: Sales of existing homes decreased 4.9% in January but were up 2.0% from January 2024. The median existing-home price was $396,900 in January, down from the December price of $403,700 but 4.8% higher than the January 2024 estimate of $378,600. Unsold inventory of existing homes represented a 3.5-month supply at the current sales pace, up from December (3.2 months) and above the 3.0-month supply in January 2024. Sales of existing single-family homes decreased 5.2% in January but were 2.2% higher than the estimate from a year earlier. The median existing single-family home price was $402,000 in January, down from the December figure of $408,500 but above the January 2024 estimate of $382,900.
• New single-family home sales fell 10.5% in January and were 1.1% below the January 2024 figure. The median sales price of new single-family houses sold in January was $446,300 ($415,000 in December) and higher than the January 2024 estimate of $430,400. The January average sales price was $510,000 ($509,700 in December) but below the January 2024 average sales price of $527,800. The inventory of new single-family homes for sale in January represented a supply of 9.0 months at the current sales pace, up from December’s 8.0-month supply.
• Manufacturing: Industrial production increased 0.5% in January following a 1.0% advance in December. Manufacturing output slid 0.1% in January after gaining 0.5% in December. Mining decreased 1.2%, while utilities advanced 7.2%. Over the 12 months ended in January, total industrial production was 2.0% above its year-earlier reading. Since January 2024, manufacturing increased 1.0%, utilities rose 6.9%, while mining increased 3.4%.
• New orders for durable goods increased 3.1% in January after declining 1.8% in the prior month. For the 12 months ended in January, durable goods orders advanced 4.3%. Excluding transportation, new orders were unchanged in January from the prior month. Excluding defense, new orders rose 3.5%. Transportation equipment increased 9.8% in January following two consecutive monthly decreases.
• Imports and exports: Import prices rose for the fourth straight month after advancing 0.3% in January, the largest monthly increase since April 2024. Higher fuel and nonfuel prices in January contributed to the overall increase in import prices. Import fuel prices advanced 3.2% in January, also the largest monthly advance since April 2024. Import fuel prices rose 2.4% over the past 12 months. Prices for nonfuel imports ticked up 0.1% in January and advanced 1.8% over the last 12 months. Prices for exports rose 1.3% in January, the largest monthly gain since May 2022. Higher nonagricultural export prices in January more than offset lower agricultural export prices. Export prices rose 2.7% over the past year, the largest 12-month advance since the 12-month period ended December 2022.
• The international trade in goods deficit was $153.3 billion in January, up $31.2 billion, or 25.6%, from December. Exports of goods were $172.2 billion in January, $3.3 billion, or 2.0%, over December exports. Imports of goods were $325.4 billion in January, $34.6 billion, or 11.9%, more than December imports. Over the 12 months ended in January, the goods deficit grew 69.8%. Exports rose 1.8%, while imports increased 25.5%.
• The latest information on international trade in goods and services, released February 5, was for December and revealed that the goods and services trade deficit was $98.4 billion, an increase of $19.5 billion, or 24.7%, from the November deficit. December imports were $364.9 billion, $12.4 billion, or 3.5%, more than November imports. December exports were $266.5 billion, $7.1 billion, or 2.6%, less than November imports. For 2024, the goods and services deficit increased $133.5 billion, or 17.0%, from 2023. Exports increased $119.8 billion, or 3.9%. Imports increased $253.3 billion, or 6.6%.
• International markets: In Germany, consumer prices rose 2.3% in February, unchanged from the prior month and in line with expectations. A sharp increase in energy costs helped propel the Eurozone inflation rate to 2.5% in January, the highest it’s been since July 2024. Canada’s annual inflation rate inched up 0.1 percentage point to 1.9% in January but remained below the Bank of Canada’s target rate of 2.0% for the sixth straight month. Many of President Trump’s tariffs are proposed as reciprocal in nature, aimed at countries that impose value-added taxes (VAT) on imports. For example, Germany’s VAT is 19.0%, France’s is 20.0%, Japan imposes a 10.0% VAT, and China has a VAT of 13.0%. At this point, the U.S. does not have a VAT system. In February, the STOXX Europe 600 Index rose 3.0%; the United Kingdom’s FTSE advanced 1.4%; Japan’s Nikkei 225 Index fell 6.1%; and China’s Shanghai Composite Index increased 2.2%.
• Consumer confidence: The Conference Board Consumer Confidence Index® decreased in February to 98.3, down 7.0 points from the January reading. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, dropped 3.4 points to 136.5 in February. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, tumbled 9.3 points to 72.9 in February. For the first time since June 2024, the Expectations Index was below the threshold of 80 that usually signals a recession ahead.

Eye on the Month Ahead

Looking ahead to March, investors will pay particular attention to inflation data as February brought increased concerns that price pressures may be on the rise again.