Money Talk Podcast

Landaas & Company newsletter  July edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Mike Hoelzl

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (June 26-30, 2023)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

Orders for durable goods rose 1.7% in May, the third consecutive gain in the measure of manufacturing demand. A 32% increase in commercial aircraft orders and a 2% rise in automotive orders led the uptick, the Commerce Department reported. Excluding transportation equipment, durable goods orders advanced just 0.6% from April. Overall orders were up 3.5% from the year before but just 0.4% without transportation equipment. Core capital goods orders, a proxy for business investments, rose 0.7% from April and were up 2.7% from May 2022.

Housing prices declined from the year before for the first time since 2012, according to the S&P CoreLogic Case-Shiller home price index. Prices in April sank 0.2% from April 2022. The year-to-year comparison had been decelerating since peaking at a record gain of 21% last June. On a monthly basis, which gets clouded with seasonal factors, the index rose marginally from March, prompting an S&P analyst to note that a broad pricing recovery might be underway. S&P added that housing continued to face challenges from higher mortgage rates and a weakened economy.

The annual rate of new home sales improved in May, rising for the third month in a row and the seventh time in eight months. At 763,000 houses a year, the rate was the highest since February 2022, just before the Federal Reserve began raising interest rates to dampen inflation. According to the Commerce Department, the inventory of new houses for sale fell to a seven-month month supply, down 12% from April and down 19% from May 2022. The median sales price was $416,300, down 8% from May 2022.

The Conference Board said its consumer confidence index rose in June to its highest level since January 2022. Consumers expressed improved views of both current economic conditions and expectations for the future. The expectations index reached 79.5, staying lower than 80 for the 15th time in 60 months. The business research group said readings below 80 suggest anticipation of a recession in the next six to 12 months. Expectations for inflation reached the lowest since December 2020. A favorable job market appeared to be fueling consumer confidence, according to the Conference Board, although plans for major purchases have been slowing and revenge vacation spending may have peaked.

Wednesday

No major releases

Thursday

The U.S. economy grew at an annual pace of 2% in the first quarter, according to the last of three estimates of the gross domestic product. The increase was up from an earlier estimate of 1.3%, in part because consumer spending was stronger than initially measured and imports – which weigh against economic growth – were lower. The 2% growth rate was down from a 2.6% pace in the final quarter of 2022. Inflation-adjusted data from the Bureau of Economic Analysis showed the economy 1.6% larger at the end of the first quarter than it was the year before.

The four-week moving average for initial unemployment claims rose for the fourth week in a row, reaching its highest level since November 2021. Even so, Labor Department figures show the moving average 30% below the 56-year average, although it was 23% higher than it was just before the COVID-19 pandemic. Nearly 1.7 million Americans were claiming unemployment compensation in the latest week, up 1.4% from the week before and up 29% from the year before.

Pending home sales sank 2.7% in May, according to an index from the National Association of Realtors. Demand for existing houses was 22% below the index in May 2022. The trade group blamed lack of housing inventory for suppressing demand, noting that newly built houses were not coming on the market fast enough.

Friday

Consumer spending slowed in May as personal income remained steady, according to the Bureau of Economic Analysis. Personal spending accounts for about two-thirds of economic growth and increased by 0.1% from April. April spending was 0.6% higher than March. Controlling for inflation, consumer spending was unchanged for the third time in four months. The report also showed that the Federal Reserve Board’s favorite measure of inflation eased to 3.8% from the year before, the lowest it has been in more than two years but still nearly twice the Fed’s long-range target.

A precursor to consumer spending, consumer sentiment, improved in June with brighter economic outlooks both for the year ahead and longer. The University of Michigan said its longstanding survey found attitudes recovered from the debt ceiling controversy resolved by politicians earlier in the month. And though consumers were calming down amid signs of slower inflation, the persistence of high prices continued to weigh on their financial outlooks.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 13788, up 295 points or 2.2%

Standard & Poor’s 500 – 4450, up 102 points or 2.3%

Dow Jones Industrial – 34406, up 679 points or 2.0%

10-year U.S. Treasury Note – 3.82%, up 0.08 point

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  June edition now available.

Advisors on this week’s podcast

Kyle Tetting

Adam Baley

Dave Sandstrom

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (June 19-23, 2023)

Significant Indicators & Reports

Monday

Markets closed in observance of Juneteenth Day

Tuesday

The annual pace of housing starts and building permits suggested the construction industry was picking up in May. A joint report from the departments of Commerce and Housing and Urban Development showed new construction rising nearly 22% from April’s pace while permits rose 5%. Permits were at their fastest pace since September, despite being 13% below their level the year before. Housing starts, led by multi-family units, were the highest since April 2022, which marked the fastest pace since 2006. The number of houses under construction in May hovered near record heights, based on data going back to 1970.

Wednesday

No major reports

Thursday

The four-week moving average for initial unemployment claims continued to rise, up for the third week in a row and the fourth time in five weeks. The Labor Department reported that the average level of new claims was at its highest point since November 2021. Though still 30% below the 56-year average, the measure of employer reluctance to part with workers was 23% above its low just before the COVID-19 pandemic. Nearly 1.7 million Americans claimed unemployment insurance benefits in the latest week, up 3% from the week before and up 29% from the same time last year.

The National Association of Realtors said steady mortgage rates helped existing home sales grow marginally in May. The seasonally adjusted annual rate of 4.3 million houses sold was up 0.2% from April’s pace but down 20% from the year before, when conventional mortgage rates were nearly a full percentage point lower. The trade association pointed to low inventory as an ongoing hindrance to sales, noting that the number of houses for sale were about half the level in 2019. Weakened demand resulted in the median sales price sinking 3% from May 2022 to $396,100.

The Conference Board’s index of leading economic indicators fell 0.7% in May, for the 14th consecutive decline. The business research group cited a negative yield spread and drops in consumer expectations, factory orders and credit conditions for the monthly setback. Since November, the index was down 4.3%, compared to a 3.8% decline over the prior six months. The Conference Board forecast marginal growth for the economy in the second quarter followed by recession toward the end of 2023 and into the beginning of 2024.

Friday

No major reports

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 13493, down 197 points or 1.4%

Standard & Poor’s 500 – 4348, down 61 points or 1.4%

Dow Jones Industrial – 33729, down 571 points or 1.7%

10-year U.S. Treasury Note – 3.74%, down 0.03 point

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  June edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Tom Pappenfus

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (June 12-16, 2023)

Significant Economic Indicators & Reports

Monday

No major reports

Tuesday

The broadest measure of inflation slowed to the lowest rate in more than two years, though it was still twice as high as the long-range Federal Reserve target. The Consumer Price Index rose 4% in May, down from 4.9% in April and a decades-high 9.1% in June, according to the Bureau of Labor Statistics. Inflation inched up 0.1% from April as a 5.6% drop in gas prices offset higher costs for shelter, used vehicles and food away from home. Excluding volatile prices for food and energy, the so-called core CPI rose 0.4% for May, trending on par with April and March. Since May 2022, the core rate increased 5.3%, the lowest in 18 months.

Wednesday

Inflation on the wholesale level also continued to retreat in May. The Bureau of Labor Statistics said the Producer Price Index declined 0.3% from April, falling for the third time in four months, led by a 14% drop in gas prices. Excluding volatile prices for food, energy and trade services, the core PPI was unchanged from April. Compared to 12 months prior, wholesale inflation rose 1.1% in May, the lowest since the end of 2020 and down from more than 11% last June. Core PPI was up 2.8% from May 2022, when the rate had reached 6.8%.

Thursday

Amid signs of a slowing economy, consumers continued to fuel further growth in May, sending retail sales up 0.3%. Lower prices at gas stations held back the overall gain in retail sales, which was led by car dealerships and home-and-garden centers. Adjusted for inflation, retail sales rose 0.2% from April, the first measurable increase since December. Compared to May 2022, total retail sales rose by 1.6%, including an 8% gain at bars and restaurants.

The four-week moving average for initial unemployment claims rose for the third time in four weeks to its highest level since November 2021. Still, the indicator of employers’ willingness to let workers go remained 33% below its 56-year average. According to the Labor Department, total claims for jobless benefits reached more than 1.6 million, down slightly from the week before. The year before, claims were below 1.3 million; at the same point in 2021, they had reached 14.8 million.

U.S. industrial output declined 0.2% in May, the first dip in five months. The Federal Reserve reported broad modest setbacks in production except in the manufacturing of defense equipment and aerospace gear. Manufacturing output rose slightly for the fourth time in five months. Capacity utilization — often an early indicator of inflation —fell to 79.6%, just below its level in April and nearly the same as the average 7.97% rate since 1972.

Friday

With inflation cooling and the debt ceiling lifted, consumer sentiment is on the rise, according to the University of Michigan. A preliminary June reading of the university’s longstanding consumer surveys showed sentiment still historically weak but up 28% from the all-time low set a year ago. While expectations for inflation are receding, consumers still anticipate a more difficult economy in the next year. Economists see consumers’ sentiment as a predictor of their spending, which generates two-thirds of U.S. economic growth.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 13690, up 430 points or 3.2%

Standard & Poor’s 500 – 4410, up 111 points or 2.6%

Dow Jones Industrial – 34301, up 424 points or 1.3%

10-year U.S. Treasury Note – 3.77%, up 0.02 point

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  June edition now available.

Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Tom Pappenfus

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (June 5-9, 2023)

Significant Economic Indicators & Reports

Monday

Though at a slower pace, the services industry expanded in May for the fifth month in a row and the 35th time in 36 months, according to the Institute for Supply Management. The ISM services index, based on surveys of purchasing managers, suggested stable but slowing conditions amid sluggish demand and weaker hiring. Slower growth resulted in further reduction in the supply chain challenges that clogged the industry in the early recovery from the pandemic. The ISM reported the lowest back logs and smoothest suppliers’ deliveries since 2009.

The Commerce Department said factory orders rose in April for the fourth time in five months, though largely because of military orders. Overall, orders gained 0.6% from March, but excluding defense contracts, they declined 0.4%. The military accounted for about half of the 1.4% year-to-year growth in factory orders. In comparison, core capital goods orders, a proxy for business investments, rose 1.3% from March and were up 2.7% from April 2022.

Tuesday

No major releases

Wednesday

The U.S. trade deficit widened 23% in April to $74.6 billion from $60.6 billion in March. The Bureau of Economic Analysis reported that U.S. exports shrank 3.6% from March, led by goods, especially oil and industrial materials. Imports grew 1.5%, led by automotive products and cell phones. Through the first four months of 2023, the trade gap grew 24% from the year before. In that time, exports grew 6%, and imports declined 2%. Because trade deficits count against gross domestic product, the widened gap is another sign of slowed economic growth.

The Federal Reserve Board reported that outstanding revolving consumer credit debt rose again in April, though at a slightly slower rate. While total debt rose at a 5.7% annual rate from March, revolving credit, which mostly includes credit cards, increased at a 13.1% pace. That was down from 14.6% in March, marking the fourth deceleration in five months. Still, consumers increased credit card debt for the 24th month in a row. An indicator of consumer confidence, the level of credit card debt was up $146 billion or 13% from when the pandemic started. The measure took 26 months to recover from its collapse after the pandemic. In contrast, it took more than 10 years to recover from the Great Recession.

Thursday

Though still historically low, the four-week moving average of initial unemployment claims rose for the second time in three weeks. The measure of employers’ reluctance to let workers go reached its highest level in five weeks but was 35% below the 56-year average, according to Labor Department data. Some 1.6 million Americans claimed jobless benefits in the latest week, down slightly from the week before but up 27% from the year before.

Friday

No major releases

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 13259, up 18 points or 0.1%

Standard & Poor’s 500 – 4299, up 16 points or 0.4%

Dow Jones Industrial – 33877, up 114 points or 0.3%

10-year U.S. Treasury Note – 3.75%, up0.05 point

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  June edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Mike Hoelzl

(with Max Hoelzl, Joel Dresang, engineered by Kevin Lofy)

Week in Review (May 29-June 2, 2023)

Significant Economic Indicators & Reports

Monday

Markets and government closed for Memorial Day

Tuesday

Housing prices continued to decelerate in March, although some data suggested the trend might be reversing. The S&P CoreLogic Case Shiller home price index grew at a 12-month rate of 0.7%, down from nearly 21% the year before, which was the highest in more than 35 years of data. An analyst for S&P noted regional differences with home prices rising faster in the Southeast (up 5.4%) and actually declining in the Northwest (down 6.2%). Also, month-to-month measures suggested price gains may be increasing again, despite higher mortgage rates in the last year and a weaker economy.

The Conference Board said its consumer confidence index declined in May, though not as much as analysts expected. The business and research group said perceived weakness in the labor market lowered views of current conditions. Expectations for the economy faded slightly and remained below the level associated with recession for the 14th time in 15 months. Consumers older than 55 especially soured on the outlook.

Wednesday

U.S. employers posted 10.1 million job openings in April, up 3.7% from March, making it the first increase in four months. Retailers and health care employers led the gain in want ads, as the gap grew between jobs posted and unemployed job seekers. The Bureau of Labor Statistics also reported a 4.7% decline in the number of layoffs, led by the construction industry. The degree to which workers were quitting their jobs voluntarily – a sign of worker confidence in the hiring market – remained steady, down from the historic peak of the year before but still well above the long-time average.

Thursday

The four-week moving average for initial unemployment claims declined for the third time in four weeks to its lowest level since March and 38% below the all-time average, dating back to 1967. New Labor Department data showed more than 1.6 million Americans claimed unemployment compensation in the latest week, down marginally from the week before, up from 1.3 million the year before but down from more than 15 million at the same time in 2021.

The Bureau of Labor Statistics said worker productivity fell at an annual rate of 2.1% in the first quarter. Non-farm output rose at an annual pace of 0.5% in the first three months of the year while hours worked rose at a 2.6% rate. Since the first quarter of 2022, productivity dipped 0.8% for the fifth consecutive quarter of decline, which had never happened before in data going back to 1947. Since just before the pandemic, productivity has increased by an annual rate of 1.1%, a historic low for business cycles, according to the BLS. Labor costs rose at a 4.2% rate in the first quarter, which factors in the 2.1% productivity growth and a 2.1% rise in hourly compensation. Since the first quarter of 2022, labor costs increased 3.8%.

The manufacturing sector shrank again in May. The Institute for Supply Management said its manufacturing index landed under 50 for the seventh month in a row, suggesting the industry was contracting. Rises in production and employment components of the index were offset by declines in new orders, supplier deliveries and inventories. The trade group said its index, based on surveys of purchasing managers, suggested the U.S. economy was receding at an annual pace of 0.6%.

The pace of construction spending rose 1.2% in April, the third increase in a row and the sixth in eight months. The record annual rate of more than $1.9 trillion was up 7.2% from April 2022, the Commerce Department reported. Residential spending, which accounts for about 45% of total spending, rose 0.4% from the March pace. Residential spending was down 9% from the year before, including a 25% decline in  single-family housing.

Friday

U.S. employers added 339,000 jobs in May, the third straight acceleration in hiring despite Federal Reserve Board attempts to slow the economy. According to payroll data from the Bureau of Labor Statistics, the pace of employment neared the 12-month average and was led by gains in professional and business services, government, and health care. Hiring in the leisure and hospitality field slowed from its 12-month pace and remained below its level just before the pandemic. The bureau’s household survey showed the unemployment rate rising to 3.7% from a decades-low 3.4% in April.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 13241, up 265 points or 2%

Standard & Poor’s 500 – 4282, up 77 points or 1.8%

Dow Jones Industrial – 33763, up 669 points or 2%

10-year U.S. Treasury Note – 3.69%, down 0.12 point

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  June edition now available.

Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Adam Baley

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (May 22-26, 2023)

Significant Economic Indicators & Reports

Monday

No major reports

Tuesday

The annual sales rate of new houses increased un April for the third month in a row and was up nearly 12% from the year before. The pace was 2% below where it was at the onset of the COVID-19 pandemic and down 33% from its recent peak in late 2020. The Commerce Department said the median price fell 8% from April 2022 to just under $421,000.

Wednesday

No major reports

Thursday

The four-week moving average for initial unemployment insurance claims was unchanged with just one increase in the last six weeks, according to new data from the Labor Department. An indication of employer reluctance to let workers go, the moving average was down 37% from its long-time average going back to 1967. Some 1.6 million Americans received jobless benefits in the latest week, down 2.8% from the week before but up 24% from the year before.

The U.S. economy grew slightly faster than initially estimated in the first quarter, rising at an annual rate of 1.3%. At first, the Bureau of Economic Analysis figured gross domestic product grew at a 1.1% annual pace, but consumer spending, exports, government spending and commercial investments increased more than estimated. Offsets occurred in part through declines in inventories and decreased residential spending – for the eighth consecutive quarter. The inflation-adjusted level of GDP was up 1.6% from the first quarter of 2022 and was 6.8% above the pre-pandemic peak. The Federal Reserve Board’s preferred inflation indicator showed a 4.2% increase from the year before, unchanged from previous estimates.

The National Association of Realtors said its pending home sales index was unchanged in April but down more than 20% from April 2022 and down about 21% from what the trade group considers normal. The association blamed limited inventory and affordability challenges for a lull in commitments from homebuyers. Having more houses for sale, the Realtors said, would spur sales.

Friday

The Bureau of Economic Analysis said consumer spending rose 0.8% in April, the fourth gain in a row and the highest since January. Personal income meanwhile rose 0.4%, sending the personal saving rate down to 4.1% of disposable income, the first dip in seven months. In the same report, the Federal Reserve’s preferred gauge of inflation rose 4.4% from April 2022, up from 4.2% in March. That’s down from a four-decade high of 7% last June but more than double the Fed’s long-term target of 2% inflation.

A precursor to spending, consumer sentiment, declined further in May, erasing half the gains made since hitting an all-time low last June. The University of Michigan said descending sentiment mirrored how consumers reacted to the partisan debt ceiling standoff in 2011. Surveys showed consumers steady on inflation expectations and personal financial outlooks but worried that a recession would inflict lasting pain.

The Commerce Department said military aircraft boosted durable goods orders 1.1% in April. Excluding the volatile transportation sector, orders slipped 0.2%; excluding military equipment, orders declined 0.6%. Since April, total orders rose 2.6% but were up just 0.3% excluding transportation and up 1.1% excluding defense orders. A proxy for business investments rose 1.4% from March and was up 2.7% from April 2022.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12976, up 318 points or 2.5%

Standard & Poor’s 500 – 4205, up 13 points or 0.3%

Dow Jones Industrial – 33093, down 333 points or 1.0%

10-year U.S. Treasury Note – 3.81%, up 0.17%

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  May edition now available.

Advisors on This Week’s Show

Kyle Tetting

Mike Hoelzl

Kendall Bauer

(with Max Hoelzl and Joel Dresang engineered by Kevin Lofy)

Week in Review (May 15-19, 2023)

Significant Economic Indicators & Reports

Monday

No major announcements

Tuesday

Consumers returned to car dealerships and home improvement centers and kept going to bars and restaurants in April, as retail sales rose for the first time in three months. The Commerce Department reported a 0.4% increase from March as revenue rose in seven of 13 categories. Spending at retailers advanced 1.6% from April 2022, with higher sales in six categories, including online and at restaurants and bars. Corrected for inflation, sales inched up 0.1% from March and were down 3.2% from April 2022, the fifth year-to-year decline in six months.

The Federal Reserve said its industrial production index rose 0.5% in April after two months of moving sideways. A 1% surge in output boosted the index amid a minimal rise in the mining sector and a decline in utilities production resulting from mild weather. Auto making led the lift in manufacturing, which was up for the third time in four months. Total capacity utilization rate rose to 79.7%, the highest since November and on par with its average since 1972. Manufacturing capacity was near its long-term average, and mining capacity remained above normal. Meanwhile, utilities continued to be using less capacity than they have historically.

Wednesday

Construction of new houses quickened slightly while plans for more stepped back in April, according to a Commerce Department report on building permits and housing starts. The figures showed a 2% rise in the annual pace of starts compared to March at the same time permits fell nearly 2%. Relative to April 2022, both indicators were down more than 20%, coinciding with steep interest rate increases. Both starts and permits stayed below the pace heading into the COVID pandemic. The number of houses under construction remained near record highs, especially for multi-family housing.

Thursday

The four-week moving average for initial unemployment claims fell for the first time in three weeks after hitting its highest level in 18 months. The average remained above the low point heading into the pandemic but was 34% below the 56-year average. Total claims fell 2% from the week before, just under 1.4 million applications, which was 23% higher than the year before, according to Labor Department data.

The Conference Board said its leading economic indicators shrank 0.6% in April, the 13th consecutive decline, signaling recession. The business research group noted that weakness rose from a decline of 1.2% in March, but the six-month drop of 4.4% exceeded the fall during the prior six months. Based on its index, the Conference Board forecast a mild recession for the U.S. economy beginning midyear.

A combination of strong job market, vacillating mortgage rates and limited supply is causing existing home sales to bounce around, resulting in a 3.4% decline in April, according to the National Association of Realtors. The annual sales rate fell to below 4.3 million houses, down 23.2% from April 2022. The trade group said inventories rose only slightly and were just 2.9 months’ supply at the current sales pace. The median price fell to $388,800, down 1.7% from the year before. It was the second straight year-to-year price drop after nearly 11 years of consecutive gains.

Friday

No major announcements

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12658, up 373 points or 3%

Standard & Poor’s 500 – 4192, up 68 points or 1.6%

Dow Jones Industrial – 33426, up 126 points or 0.4%

10-year U.S. Treasury Note – 3.69%, up 0.23%

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  May edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Steve Giles

(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

Week in Review (May 8-12, 2023)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

No major releases

Wednesday

Inflation continued to slow in April, though it remained well above Federal Reserve Board targets. The Bureau of Labor Statistics reported that its Consumer Price Index rose 4.9% from April 2022, the 10th consecutive reduction in pace since exceeding a four-decade high of 9% last June. It was the lowest 12 rate since April 2021 but more than double the Fed long-range target of 2% inflation. Shelter costs contributed the most to the monthly rise, but their 0.4% gain from March was the slightest for the category in 15 months. A 3% rise in gasoline prices also boosted the index as well as a 4.4% jump in the cost of used vehicles.

Thursday

The four-week moving average for initial unemployment claims rose for the second week in a row, reaching its highest point since November 2021. Still, data from the Labor Department showed the measure 31% below the 56-year average, suggesting continued reluctance by employers to let workers go. Total claims for benefits declined 3% in the latest week to just under 1.8 million, compared to 1.4 million the year before.

Inflation on the wholesale level registered a 2.3% annual increase in April, the lowest since January 2021. The Producer Price Index was down from as high as 11.2% last June. The Bureau of Labor Statistics said the index rose 0.2% from March, the first monthly gain in four months, mostly because of higher prices for services but also due to an increase in the cost of gasoline. The core rate of wholesale inflation, stripping out volatile prices for food, energy and trade services, also rose 0.2% for the month and was up 3.4% from April 2022.

Friday

The University of Michigan said consumer sentiment declined sharply from the end of April as both expectations and current assessments fell amid renewed concerns about the economy. Despite lack of empirical evidence, the university said, consumers are losing faith in the economy, exacerbated by political confrontations over the federal debt ceiling. The latest survey wiped out nearly half the gains made since consumer sentiment reached an all-time low last June.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12285, up 49 points or 0.4%

Standard & Poor’s 500 – 4124, down 12 points or 0.3%

Dow Jones Industrial – 33301, down 374 points or 1.1%

10-year U.S. Treasury Note – 3.46%, up 0.02%

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  May edition now available.

Advisors on This Week’s Show

Kyle Tetting

Tom Pappenfus

Kendall Bauer

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (May 1-5, 2023)

Significant Economic Indicators & Reports

Monday

The manufacturing sector continued contracting in April for the sixth month in a row, according to the Institute for Supply Management. The trade group’s index, based on surveys of purchasing managers, showed employment as the only component to grow from March. Although April’s contraction slowed from March, manufacturing’s business activity started dropping off last June. With declines in demand for manufactured goods, the ISM noted improved responsiveness from supply chains.

The Commerce Department said construction spending rose in March for the first time in four months. Increased spending on manufacturing construction helped offset a 2% drop in residential expenditures. At a seasonally adjusted annual rate of more than $1.8 trillion, construction spending rose 3.8% from March 2022. Housing, which accounted for about 46% of total spending, was down 9.8% from the year before. Government outlays for construction rose 0.2% for the month and 15% over the year, including big increases for conservation and development.

Tuesday

The tight hiring market loosened a little in March as job openings declined and layoffs and discharges rose. The Bureau of Labor Statistics said openings shrank for the third month in a row to 9.6 million, the lowest in two years, though they remained above the pre-pandemic peak of 7.6 million. More employers let workers go in March, especially in construction and at hotels and restaurants. The number of workers quitting their jobs – a sign of employment confidence – also fell. Still, open jobs continued to far outnumber the 5.8 million unemployed job seekers in March.

The Commerce Department said factory orders rose in March for the first time in four months, though a surge in demand for commercial aircraft tipped the scale. Excluding orders for transportation equipment, demand for manufactured goods fell for the fourth time in five months. Compared to March 2022, the dollar amount for total orders rose 2.4%, vs. a 1.4% gain excluding transportation. A proxy for business investments rose 3.2% from its year-earlier level but declined for the fourth time in five months.

Wednesday

The service sector of the U.S. economy kept growing in April, accelerating slightly from March, signaling a fourth consecutive expansion. The Institute for Supply Management said its index for the service sector showed growth for the 34th time in 35 months. An uptick in new orders and continued improvements in capacity and logistics boosted the index from March. Purchasing managers surveyed by the trade group cited ongoing concerns about inflation and economic slowdown. The ISM said the index suggested the overall economy was growing at a 0.7% annual rate.

Thursday

The U.S. trade deficit shrank 9.1% in March to $64.2 billion as the value of exports rose 2.1% while imports declined 0.3%. Leading the increase in exports were industrial products such as crude oil. Consumer goods, including cell phones, led imports lower. The Bureau of Economic Analysis said the first-quarter deficit widened 27.6% from the year before as exports fell 8.7% while imports fell 1.6%. Trade deficits detract from gross domestic product, the key measure of economic growth.

The four-week moving average for initial unemployment claims rose for the first time in three weeks. The moving average was 35% below the all-time average. The Labor Department said fewer than 1.8 million Americans claimed jobless benefits in the latest week, down 2% from the week before but up 20% from about 1.5 million the year before. Two years prior, total claims exceeded 16 million.

The Bureau of Labor Statistics said worker productivity sank at an annual rate of 2.7% in the first quarter, as the pace of output barely budged at 0.2% while hours worked rose 3%. Compared to the first quarter of 2022, productivity fell 0.9% - the fifth consecutive year-to-year decline, which never occurred before in 75 years of data. And while output per hour fell in the first quarter, compensation per hour rose. Employers’ labor costs rose at a 6.3% annualized rate or 5.8% if measured from the first quarter of 2022.

Friday

U.S. employers added 253,000 jobs in April, putting them 3.3 million or 2.2% ahead of where they were before COVID-19 hit in February 2020. According to payroll data from the Bureau of Labor Statistics, the additional jobs were short of the 290,000 six-month average but showed a broad-based resilience amid some signs of the economy slowing. The leisure and hospitality industry continued adding jobs, though it remained down from pre-pandemic levels by 402,000 jobs or 2.4%. A separate survey of households showed the unemployment rate dipping back to 3.4%, where it was in January, the lowest since 1969. The unemployment rate for Black Americans reached an all-time low of 4.7%, and the labor force participation rate of 25- to 54-year-olds rose to 83.3%, the highest since 2008.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12235, up 9 points or 0.1%

Standard & Poor’s 500 – 4136, down 33 points or 0.8%

Dow Jones Industrial – 33674, down 424 points or 1.2%

10-year U.S. Treasury Note – 3.45%, no change

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail

Landaas & Company newsletter  May edition now available.

Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Adam Baley

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (April 24-28)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

Elevated mortgage rates and economic uncertainty continued to weaken demand for housing, resulting in lower gains in residential prices in February, according to the S&P CoreLogic Case-Shiller home price index. The national index rose by 2% from the year before, the lowest 12-month increase since August 2012. The year-to-year gain has decelerated every month since hitting a record 20.8% in March 2022.

The Commerce Department said the annual rate of new home sales rose 9.6% in March, though it was down more than 3% from the year-earlier pace and just below the level going into the COVID-19 pandemic. The supply of new houses for sale rose to the highest level since November, according to seasonally adjusted estimates. The cost of ownership continued to rise. The median sales price was up 3% from March 2022 to $449,800.

The Conference Board said its consumer confidence index declined in April with expectations falling below a level associated with impending recession for the 13th time in 14 months. The business research group said consumer attitudes toward current economic conditions picked up from March and expectations for inflation in the next year were unchanged, at around 6%. But fewer consumers reported plans to spend on big-ticket items such as cars, appliances and vacations. Consumer spending accounts for about two-thirds of U.S. economic activity.

Wednesday

Manufacturing demand picked up in March, with durable goods orders rising 3.2% from February, the first increase in three months, according to the Commerce Department. Gains were led by a 78% rise in commercial aircraft orders. Excluding volatile transportation equipment, durable goods orders rose 0.4%. Since March 2022, all orders rose 3.3%, including 1.5% without transportation. Core capital goods orders, a proxy for business investment, declined 0.4% from February and were up 1.4% from March 2022.

Thursday

The U.S. economy grew at an annual pace of 1.1% in the first quarter, the slowest rate for the gross domestic product since back-to-back declines to start 2022. The Bureau of Economic Analysis reported consumer spending rose at a 3.7% rate in the first three months of 2023, which was the fastest pace in seven quarters. Offsetting that were weaker spending by businesses and the eighth consecutive quarter of declines for housing. Adjusted for inflation, GDP was up 1.3% from the first quarter of 2022 and 5% above the peak prior to the pandemic. The Federal Reserve Board’s preferred measure of inflation rose 4.9%, the lowest in six quarters.

The four-week moving average for initial unemployment claims fell for the second week in a row and the third time in four weeks. The average was 36% below the 56-year average, according to Labor Department data. In the latest week, 1.8 million Americans claimed jobless benefits, down 0.4% from the week before and up from 1.6 million the year before.

The National Association of Realtors said its index of pending home sales fell 5.2% in March, the first decline in four months. The trade group’s index was down 23% from the year before. An economist for the association blamed low inventory for the latest setback, noting that there’s still enough demand for houses that about a third of March sales involved multiple offers and 28% sold for more than the asking price. The Realtors forecast a 9% drop in houses sold this year and projected a 15% rebound in 2024.

Friday

The Bureau of Economic Analysis said consumer spending rose less than 0.1% in March as increased expenditures on services such as housing and health care were offset by lower outlays for goods, including cars. The pause in spending came as personal income rose 0.3% from February, resulting in the personal savings rate (5.1% of disposable income) rising for the sixth month in a row. The personal consumption expenditures index, which the Fed follows for inflation, rose 4.2% from March 2022, the lowest inflation rate in nearly two years. The Fed’s long-range target is 2%.

Often a pre-cursor to spending, consumer sentiment, rose slightly in April but stayed low historically. The longstanding survey from the University of Michigan showed consumer outlooks barely budging while feelings toward current conditions improved marginally. The university said ongoing expectations of elevated inflation were eating into consumers’ assessment of their personal finances.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12227, up 154 points or 1.3%

Standard & Poor’s 500 – 4170, up 36 points or 0.9%

Dow Jones Industrial – 34099, up 290 points or 0.9%

10-year U.S. Treasury Note – 3.45%, down 0.12 point

Not a Landaas & Company client yet? Click here to learn more.

More information and insight from Money Talk

Money Talk Videos

Follow us on Twitter.

Landaas newsletter subscribers return to the newsletter via e-mail