Money Talk Podcast

Landaas & Company newsletter  July edition now available.

Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Chris Evers

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

Week in Review (July 11-15, 2020)

Significant economic indicators & reports

Monday

No major releases

Tuesday

No major releases

Wednesday

The broadest measure of inflation rose at a 9.1% annual rate in June, the most since November 1981, the Bureau of Labor Statistics said. The year-to-year increase in the Consumer Price Index reflected broadly rising prices but especially for food, which was up 10% from June 2021 and gasoline, which rose 60%. Excluding volatile energy and food costs, the core index rose 5.9% from June 2021, the third month in a row that the rate of inflation declined.

Thursday

Wholesale inflation also accelerated in June. The Producer Price Index rose 1.1% from May, following a 0.6% gain the month before. A 10% increase in energy prices led the boost, the Bureau of Labor Statistics reported. Compared to the year before, the index rose 11.3%, the highest wholesale inflation rate since an 11.6% increase in March. Excluding volatile costs for food, energy and trade services, the core PPI was up 6.4% from June 2021, decelerating for the third month in a row.

The four-week moving average for initial unemployment claims failed to fall for the 14th week in a row after reaching an all-time low in April. The average hit 235,750 claims in the latest week, still 36% behind its 55-year average. The Labor Department said 1.4 million Americans claimed unemployment insurance benefits in the latest week, up 5.5% from the week before but down from 13.8 million the year before.

Friday

The Commerce Department said retail sales resumed their climb in June, up 1% following a 0.1% decline in May. Inflation figured into the sales increases, with gas stations generating nearly 4% more than in May and 49% more than in June 2021. Of 13 retail categories, nine improved sales from May. Sales at bars and restaurants rose 13% from the year before, with a 9% decline for electronics and appliance stores.

U.S. industrial output signaled a slowdown, declining 0.2% in June after no change in May and a gain of 0.8% in April. The Federal Reserve reported that factory production was down 0.5% for the second month in a row. The oil and gas industry drove mining sector output up 1.7% from May. Compared to the year before, total industrial production was 4.2% ahead. Meanwhile, annual revisions in Fed data showed the capacity utilization rate for industries above the 50-year average for the fourth month a row, another sign of inflationary pressures.

Record-low consumer sentiment in June barely picked up in early July, according to preliminary survey results from the University of Michigan. Respondents’ assessments of current economic conditions improved slightly from June, with more citing an ease in supply constraints. But about half of the consumers (49%) blamed inflation for eroding their living standards, matching a record high set during the Great Recession.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11452, down 183 points or 1.6%

Standard & Poor’s 500 – 3863, down 36 points or 0.9%

Dow Jones Industrial – 31286, down 52 points or 0.2%

10-year U.S. Treasury Note – 2.93%, down 0.17 point

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Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Paige Radke

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

Week in Review (July 4-8, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

Markets and government offices closed for Independence Day.

Tuesday

Demand for manufactured goods stayed steady in May as factory orders rose 1.6% from April, the eighth consecutive increase and the 12th in the last 13 months. The Commerce Department reported a 2.9% monthly gain in consumer goods orders. Demand for transportation equipment rose for the seventh time in eight months, led by military aircraft. Core capital goods orders, a proxy for business investments, was up 0.6% from April and more than 10% from the year before.

Wednesday

The U.S. services sector continued expanding in June, although at the slowest pace since May 2020, according to the Institute for Supply Management. The trade group’s services index showed the 25th consecutive month of growth. Index components suggested employment was contracting, new orders were weakening and supplier deliveries were slowing further. The group cited “logistical challenges, a restricted labor pool, material shortages, inflation, the coronavirus pandemic and the war in Ukraine.”

U.S. employers posted 11.3 million job openings in May, down the second month in a row after a record 11.9 million in March. The Bureau of Labor Statistics reported slight declines in hiring for the third month in a row. The number of layoffs and firings rose minimally but was up for the fourth time in five months. The number of workers voluntarily quitting their jobs fell below 4.3 million for the first time since January after reaching a record 4.5 million in November.

Thursday

The four-week moving average for initial unemployment claims rose to its highest level since December, increasing for the 12th time in 13 weeks after hitting a record low in early April. Even so, average claims were 37% below the 55-year average, suggesting continued reluctance among employers to let workers go. The Labor Department said 1.3 million Americans were receiving unemployment benefits in the latest week, up 0.1% from the week before but down from 14.2 million the year before.

A decline in consumer goods imports helped narrow the U.S. trade deficit in May. The negative gap between goods and services sold from the country vs. what’s purchased from abroad narrowed for the second month in a row, falling to $85.5 billion, down 1.3% from April. Through the first five months of 2022, the deficit was 38% wider than the year before. In May, the value of exports rose 1.2%, led by energy products. Imports grew by 0.6%, with purchases of energy products and travel-related services offsetting a $1.5 billion decrease in imported consumer goods. Trade deficits count against the gross domestic product.

Friday

U.S. employers added 372,000 jobs in June, and the unemployment rate stayed at 3.6% for the fourth month in a row. The Bureau of Labor Statistics showed the overall employment picture continuing to brighten, with the number of jobs just 524,000 (0.3%) shy of the pre-pandemic level after losing about 22 million. The unemployment rate neared the 3.5% mark in February 2020, which was a 50-year low. While leisure and hospitality accounted for about a sixth of the jobs added in June, the industry remained 1.3 million (7.8%) below the February 2020 level. Private-sector employment exceeded the pre-pandemic number, but government jobs were down by 664,000 (2.9%).

 

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11635, up 507 points or 4.6%

Standard & Poor’s 500 – 3899, up 74 points or 1.9%

Dow Jones Industrial – 31339, up 242 points or 0.8%

10-year U.S. Treasury Note – 3.10%, up 0.21 point

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Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Chris Evers

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

Week in Review (June 27-July 1, 2022)

Significant Economic Indicators & Reports

Monday

The Commerce Department said orders for durable goods rose 0.7% in May, the seventh increase in eight months. The indicator for manufacturing demand reached an all-time high, unadjusted for inflation. It was nearly 11% above its level in May 2021. Orders for transportation equipment led all categories as contracts for cars and military aircraft more than offset a decline in commercial aircraft. Even excluding volatile transportation equipment, orders rose 0.7% and were about 9% above their level in May 2021. Core capital goods orders, a proxy for business investments, rose 0.5% from April and were up 10.2% from the year before.

Pending home sales rose in May for the first time in seven months. The National Association of Realtors said its index for contract signings advanced 0.7% from April, though it was down nearly 14% from May 2021. The trade group said higher mortgage rates are pulling sales lower even while demand continued to outpace supply. Based on the median sales price and a 10% down payment, the group said monthly mortgage costs were up $800 from the beginning of the year.

Tuesday

The annual gain in housing prices decelerated in April for the first time in five months but continued to far outmatch overall inflation. According to the S&P CoreLogic Case-Shiller home price index, prices rose 20.4% nationwide since April 2021. The growth rate accelerated in nine of the 20 cities in the Case-Shiller composite index. All continued to have double-digit increases. An analyst for the index said more expensive mortgage financing should slow price increases: "A more challenging macroeconomic environment may not support extraordinary home price growth for much longer.”

The Conference Board said its consumer confidence index declined in June for the second month in a row, suggesting weaker economic growth for the rest of the year and an increased chance of recession before 2023. The business research group said attitudes toward current conditions were little changed from May, but expectations fell to their lowest point in nearly a decade. At the heart of the gloom: Inflation concerns, particularly rising prices for food and gasoline.

Wednesday

The U.S. economy sank at an annual pace of 1.6% in the second quarter of 2022, according to the last of three estimates of the gross domestic product. Record trade deficits weighed heavily on the measure, reflecting unbalanced global commerce still recovering from the COVID-19 pandemic and disrupted by the war in Ukraine. Adjusted for inflation, data from the Bureau of Economic Analysis shows the economy 3.5% ahead of where it was the year before and up 2.7% from the pre-pandemic peak.

Thursday

Consumer spending slowed in May as personal income remained steady, according to the Bureau of Economic Analysis. Personal spending accounts for about 70% of GDP and actually declined 0.4% when adjusted for inflation. On balance, personal saving rose slightly to 5.4% of disposable income, up from 5.2% in April, which was the lowest since 2009. The Federal Reserve Board’s favorite measure of inflation showed signs of easing in May, reaching a 6.3% year-to-year rate, the same as April but down from 6.6% in March.

The four-week moving average for initial unemployment claims rose to its highest level since December. It has not declined since hitting an all-time low in early April. Even so,  Labor Department figures show the moving average 37% below the 55-year average, although it was 21% higher than it was just before the pandemic. More than 1.3 million Americans were claiming unemployment compensation in the latest week, up 1.3% from the week before but down from 14.7 million the year before.

Friday

The Commerce Department said construction spending dipped in May for the first time in eight months. The annual pace of such expenditures slowed 0.1% from an all-time high of nearly $1.8 trillion in April. The rate was still nearly 10% above its level the year before. Residential spending, which accounts for 53% of building outlays, rose 0.2% from April and was up 19% from May 2021. Public construction spending declined for both periods.

The Institute for Supply Management reported that its manufacturing index signaled expansion in June for the 25th month in a row, though at the slowest pace in two years. Based on surveys of purchasing managers, the index reflected easing in both supply chain congestion and hiring constraints. The trade group said the index suggested the overall economy was growing at a 1.5% annual pace after adjusting for inflation.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11128, down 480 points or 4.1%

Standard & Poor’s 500 – 3825, down 86 points or 2.2%

Dow Jones Industrial – 31097, down 403 points or 1.3%

10-year U.S. Treasury Note – 2.89%, down 0.24 point

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Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Chris Evers

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

Week in Review (June 20-24, 2022)

Significant Indicators & Reports

Monday

Markets closed in observance of Juneteenth Day

Tuesday

The National Association of Realtors blamed rising mortgage rates in part for the fourth consecutive decline in existing home sales in May. The seasonally adjusted annual rate sank 3.4% to 5.4 million houses, down 8.6% from the year-earlier pace. The trade association said sales levels were back to where they were in 2019 and the balance between sales of houses and condominiums suggested a slowdown in the pandemic trend of urban dwellers moving to suburbs. Even with falling sales, the inventory of houses on the market was about half of what's considered enough to be sustainable. Because of tight supply, the median sales price rose nearly 15% from May 2021 to $407,600, the 123rd month in a row of year-to-year increases.

Wednesday

No major reports

Thursday

The four-week moving average for initial unemployment claims continued to rise, up for the 11th week since hitting a record low in early April. The Labor Department reported that the average level of new claims was at its highest point since January, though it was still 40% below the 55-year average. Another measure, the moving average of insured unemployment, reached a 52-year low. About 1.3 million Americans claimed  unemployment insurance benefits in the latest week, up 1% from the week before but down from 14.8 million the year before.

Friday

The Commerce Department and Department of Housing and Urban Development said the annual rate of new home sales rose 10.7% in May, the first gain in five months. The sales pace of 696,000 new houses was down 5.9% from May 2021, just above the level entering the pandemic and near where it was just before the Great Recession. The supply of new houses for sale rose to the highest point since April 2008, and the median sales price rose to a new high of $449,000, up 15% from May 2021.

The University of Michigan’s consumer sentiment index fell to its lowest mark ever in June. The survey-based gauge measured 50, down from 58,4 in May and 85.5 in June 2021. Consumers continued to cite inflation as their chief concern, with 47% blaming it for lowering their standard of living. During the Great Recession, a record 48% made that claim. Consumers expressed more confusion over long-term price increases than at any time since 1991. Even so, they forecast inflation to settle at 3.1% in the long run, which was consistent with the range in the last 10 months of surveys.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11608, up 809 points or 7.5%

Standard & Poor’s 500 – 3912, up 237 points or 6.5%

Dow Jones Industrial – 31504, up 1615 points or 5.4%

10-year U.S. Treasury Note – 3.13%, down 0.11 point

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Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Chris Evers

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

Week in Review (June 13-17, 2022)

Significant Economic Indicators & Reports

Monday

No major reports

Tuesday

The Bureau of Labor Statistics said the price of gasoline contributed to rising inflation on the wholesale level in May. The Producer Price Index rose 0.8% from April, twice the rate from the month before, although half the gain between March and April. Prices rose broadly, including an 8.4% increase in gasoline prices and a 2.9% advance in the cost of trucking freight. Excluding volatile prices for food, energy and trade, the core PPI was up 0.5% in May. Compared to 12 months earlier, wholesale inflation rose 10.8% in May, which was down from 10.9% in April and 11.5% in March. Core PPI was up 6.8% from May 2021, the same rate as April.

Wednesday

The Commerce Department reported a 0.3% decline in retail sales in May as consumers forsook car dealers, appliance centers, online vendors and furniture stores. Sales rose at gas stations and grocery stores, but that was at least in part because of higher prices. The monthly decline in retail spending was the first since December. Compared to May 2021, sales rose by 8.1%, including a 43% gain at gas stations. Car dealer sales declined 5% from the year before amid ongoing supply problems.

Thursday

The four-week moving average for initial unemployment claims rose for the ninth time in 10 weeks after hitting an-all time low in early April. Despite rising 25% in that time, the moving average was still 41% below the 55-year average. According to the Labor Department, the moving average for insured unemployment reached its lowest point since 1970, and the total claims for jobless benefits fell below 1.3 million, compared to 14.8 million the year before.

The annual pace of housing starts and building permits suggested the housing industry was slowing in May with the rise in mortgage rates. A joint report from the departments of Commerce and Housing and Urban Development showed starts contracting 14% from April’s pace while permits declined 7%. Permits remained above their levels just before the pandemic, and although starts were down slightly from that period, the number of houses under construction in May reached a record high for the third month in a row.

Friday

U.S. industrial output rose 0.2% in May, the slimmest gain in five consecutive months of advance. The Federal Reserve reported a slight decline in manufacturing production, the first dip since December. Both the mining and utilities sectors increased output, with oil and gas extraction averaging gains of 2% each month since March. Capacity utilization rose to 79%, its highest level since October 2018. An early indicator of inflationary pressure, capacity usage remained below its 50-year average of 79.5%.

The Conference Board’s index of leading economic indicators declined 0.4% in May, the same as in April. The business research group said despite a near-record level for the index, the recent downward trend, along with interest rate increases by the Federal Reserve, suggest at least a near-term slowdown in economic growth. Particular items weighing down the May index were lower stock prices, slower housing construction and soured consumer expectations.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10798, down 542 points or 4.8%

Standard & Poor’s 500 – 3674, down 226 points or 5.8%

Dow Jones Industrial – 29885, down 1508 points or 4.8%

10-year U.S. Treasury Note – 3.24%, up 0.08 point

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Advisors on This Week’s Show

Kyle Tetting

Brian Kilb

Chris Evers

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

Week in Review (June 6-10, 2022)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

The U.S. trade deficit narrowed 19% in April to $87 billion after an all-time high of nearly $108 billion in March. It marked the first time the deficit shrank in six months. The Bureau of Economic Analysis said exports grew by 3.5% in April, led by oil-based industrial supplies, soybeans, aircraft and travel services. Imports declined 3.4% in April, led by consumer goods, industrial supplies and computers. Imports from China fell 18% amid COVID-19 lockdowns in some regions. Year to year, the U.S. trade deficit widened 41% with a 19% gain in exports and a 24% rise in imports. Larger deficits detract from gross domestic product and have slowed economic growth for seven consecutive quarters.

The Federal Reserve Board reported that revolving consumer credit debt outstanding surpassed its pre-pandemic high in April. While total debt rose at a 10% annual rate from March, revolving credit, which mostly includes credit cards, increased at a 20% pace. An indicator of consumer confidence, the level of credit card debt rose $133 billion or 14% since its pandemic low in January 2021. The measure took 26 months to recover, as opposed to 10 years following the great financial collapse.

Wednesday

No major releases

Thursday

Though still historically low, the four-week moving average of initial unemployment claims rose to its highest level in four months. The measure of employers’ reluctance to let workers go increased eight of the previous nine weeks after hitting a record low in April. The moving average remained 42% below the 55-year average, according to Labor Department data. Fewer than 1.3 million American claimed jobless benefits in the latest week, down from 15.3 million the year before.

Friday

The broadest measure of inflation had a 12-monthy increase of 8.6% in May, the most since December 1981. The Bureau of Labor Statistics said its Consumer Price Index rose broadly, but higher food and energy prices played a big role. Food prices rose more than 10% from May 2021, with groceries up 12%, the most since 1979. Energy costs increased 35% from the year before, with gasoline up 49% and fuel oil up 107% - the biggest jump in data going back to 1935. Excluding volatile food and energy prices, the core CPI rose 6% from May 2021. That was down from 6.2% in April and 6.5% in March.

A preliminary look at consumer sentiment in June found the lowest reading in more than four decades of surveys. University of Michigan researchers said consumers’ attitudes are comparable to opinions held in the depths of the 1980 recession. Expectations especially dropped lower, with 46% of those surveyed blaming inflation, up from 38% in May. More than half made impromptu complaints about supply shortages, which happened for the ninth month in a row.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11340, down 673 points or 5.6%

Standard & Poor’s 500 – 3901, down 208 points or 5.1%

Dow Jones Industrial – 31392, down 1507 points or 4.6%

10-year U.S. Treasury Note – 3.16%, up 0.20 point

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Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Chris Evers

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

Week in Review (May 30-June 3, 2022)

Significant Economic Indicators & Reports

Monday

Markets and government closed for Memorial Day

Tuesday

Housing prices continued to outpace overall inflation in March, even as mortgage rates rose. The S&P CoreLogic Case Shiller home price index grew at a 12-month rate of 20.6%, the highest in more than 35 years of data. Economists have expected price increases to moderate with higher interest rates as steeper borrowing costs lower demand among home buyers.

The Conference Board said its consumer confidence index declined in May after a brief gain in April. The business and research group said perceived weakness in the labor market lowered views of current conditions, but the real risk to consumer spending in coming months are attitudes toward higher prices and interest rates. Concerns about inflation stayed about where they were in April, the Conference Board reported, but consumers are shifting more of their spending from durable goods like cars to services like vacations.

Wednesday

The manufacturing sector expanded in May at a slightly faster pace. The Institute for Supply Management said its manufacturing index exceeded 50 for the 24th month in a row, suggesting the industry was growing. Purchasing managers surveyed for the index said supply chains and prices were their biggest concerns. New export orders rose slightly, a hiring component weakened and a gauge of supplier deliveries showed improvement. The trade group said its index indicates the U.S. economy is growing at an annual pace of 2.6%.

Housing led a 0.2% increase in the pace of construction spending in April, which reached a record annual rate of more than $1.7 trillion. The Commerce Department reported residential spending rose 0.9% from the March pace and was up 18% from April 2021. Public expenditures on construction were up nearly 2% from the year before, including a 6% increase on road construction.

U.S. employers posted 11.4 million job openings in April, down from a record 11.9 million in March. The Bureau of Labor Statistics also reported slight declines in the number of hires and total separations, but the number of layoffs and discharges dropped to 1.2 million, the lowest in 22 years of data. In another indication of the tight labor market, the number of unemployed job seekers per job opening fell to a record low.

Thursday

The four-week moving average for initial unemployment claims declined for the first time since hitting an all-time low in early April. A Labor Department report showed first-time applications were 44% below the 55-year average, indicating employer reluctance to let workers go in a tight labor market. About 1.3 million Americans claimed unemployment benefits in the latest week, up from more than 15 million at the same time last year.

The Bureau of Labor Statistics said worker productivity fell at an annual rate of 7.3% in the first quarter, the steepest decline since 1947. Hampered by global supply-chain snags, non-farm output contracted at a 2.3% pace while hours worked rose at a 5.4% rate. Since the first quarter of 2021, productivity dipped 0.6% as output increased 4.2% and hours worked rose 4.8%. That year-to-year decline was the biggest since 1993. Since just before the pandemic, productivity has increased by 2.6%, a rate of 1.2% per year. Labor costs rose 8.2% from the first quarter of 2021, the most since 1982.

For the 11th time in 12 months, factory orders rose in April, up 0.2% from March. Commercial aircraft contributed to the April gain, rising 2.7%. Excluding volatile transportation equipment, the Commerce Department reported, factory orders still rose 0.2% in April. Compared to the year before, total orders were up 12.6% and up 13.2% excluding transportation. Core capital goods orders, a proxy for business investment, gained 0.4% for the month and up 10.1% from the year before.

Friday

U.S. employers added 390,000 jobs in May, the lowest gain in 13 months, but drew within 822,000 jobs or 0.5% of the pre-pandemic level. According to a report from the Bureau of Labor Statistics, the leisure and hospitality field accounted for more than a fifth of the May gains but remains 1.3 million or 8% behind its February 2020 mark. The bureau’s household survey showed the unemployment rate staying at 3.6% fro the third month in a row, near the 3.5% level just before the pandemic. The number of Americans wanting jobs but not actively seeking in May was 5.7 million, 14% above the February 2020 level. About 8% of the inactive job seekers said COVID concerns kept them from looking for work.

The service sector of the U.S. economy expanded in May for the 24th month in a row, though at a slower pace for the second straight month. The Institute for Supply Management said its service index showed growth for the 146th time in 148 months. And while delays in supplier deliveries eased and prices softened from a record high in April, the trade group said purchasing managers see challenges from COVID-19, Russia’s war in Ukraine and the tight labor market.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12013, down 118 points or 1.0%

Standard & Poor’s 500 – 4108, down 50 points or 1.2%

Dow Jones Industrial – 32899, down 314 points or 0.9%

10-year U.S. Treasury Note – 2.95%, up 0.21 point

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Landaas & Company newsletter  June edition now available. Advisors on This Week’s Show Kyle Tetting Dave Sandstrom Paige Radke (with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik) Week in Review (May 23-27, 2022) SIGNIFICANT ECONOMIC INDICATORS & REPORTS Monday No major reports Tuesday The annual sales rate of new houses declined 17% in April, the […]

Landaas & Company newsletter  May edition now available.

Advisors on This Week’s Show

Kyle Tetting

Brian Kilb

Kendall Bauer

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

Week in Review (May 16-20, 2022)

Significant Economic Indicators & Reports

Monday

No major announcements

Tuesday

Inflation may be adding to consumer spending but has not yet stopped it, according to retail sales figures from April. The Commerce Department reported a 0.9% rise in sales from March, the fourth monthly gain, to a record $678 billion, not adjusted for inflation. Sales rose broadly for the month, led by car dealers and restaurants and bars. Revenue at gas stations declined 2.7% in April, largely because of a temporary drop in prices at the pump. Compared to April 2021, gas station sales rose 37%.

In another sign of continued economic growth, the Federal Reserve said its industrial production index rose 1.1% in April to an all-time high. Output increased for the fourth month in a row and the sixth time in seven months. Auto manufacturing led the boost with a 3.9% production gain in April. Industry’s capacity utilization rate, which can be an early indicator of escalating inflation, rose to 79%, the highest since December 2018 but still below the 55-year average of 79.5%. Manufacturing’s capacity rate rose to the highest point in 15 years and exceeded the long-time average for the second month in a row.

Wednesday

The supply of new houses showed signs of slowing in April as the annual pace of both building permits and housing starts declined slightly from March. The Commerce Department reported that new construction remained near levels from 16 years ago after the peak of the housing bubble. For both housing starts and permits — considered a precursor to further building — single-family housing development slowed more than apartments. Residential construction had been on the upswing in recent years to address historically low inventories amid strong demand. The number of houses under construction reached a record high in April, based on government records dating to 1970.

Thursday

The four-week moving average for initial unemployment claims rose for the sixth week in a row after hitting a record low in April. Averaging just under 200,000 claims, the level was the highest since February but 46% below the 55-year average. The average reached a record 5.3 million claims in April 2020. The Labor Department reported another measure of employers’ reluctance to let go of workers: The level of insured unemployment clipped to the lowest point since 1969.

The Conference Board said its leading economic indicators shrank 0.3% in April, largely because of weaker consumer expectations and fewer housing permits. The business research group said a flat trend for the index recently suggests continued moderate growth for the economy. It forecast a 2.3% gain in GDP for 2022. The group noted challenges to growth, including inflation, interest rates, pandemic lockdowns and supply delays.

High prices and rising mortgage rates are curbing demand from home buyers, sending existing home sales down 2.4% in April, according to the National Association of Realtors. The annual rate of sales fell to 5.6 million houses, down 5.9% from April 2021. The trade group said it expected sales to continue to fall back to pre-pandemic levels. Cooler demand meant inventories rose to a 2.2 months’ supply, which was still historically low. The median sales price rose to $391,200, up 14.8% from April 2021, the 122nd consecutive year-to-year price gain.

Friday

No major announcements

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11355, down 450 points or 3.8%

Standard & Poor’s 500 – 3901, down 123 points or 3.0%

Dow Jones Industrial – 31261, down 936 points or 2.9%

10-year U.S. Treasury Note – 2.79%, down 0.15 point

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Advisors on This Week’s Show

KYLE TETTING

ART ROTHSCHILD

PAIGE RADKE

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

Week in Review (May 9-13, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

No major releases

Tuesday

No major releases

Wednesday

By a couple of measures, inflation slowed in April, though still staying near 40-year highs. The Bureau of Labor Statistics reported that its Consumer Price Index rose a seasonally adjusted 0.3% from March, the lowest gain since August. Since April 2021, the index was up 8.3%, down from an 8.5% rate in March. Food costs rose about 1% for the month and more than 9% for the year. Gasoline dropped more than 6% in price in April but was up 44% from April 2021. The core CPI. excluding volatile prices for food and energy items, rose 6.2% from the year before, down from 6.5% in March. Costs for transportation and shelter added to the core CPI gains. Used-car prices rose nearly 23% from April 2021, though they have declined in the last three months.

Thursday

The four-week moving average for initial unemployment claims rose for the fifth week in a row after hitting an all-time low in April. Data from the Labor Department showed continued reluctance by employers to let workers go. The moving average stayed 48% below the 55-year average. Another measure of the tight job market, the level of insured unemployment, reached its lowest point since 1970. Total claims for benefits declined 2.6% in the latest week to 1.4 million, compared to 16.8 million the year before.

Inflation on the wholesale level rose 0.5% in April, the smallest gain since September. Year to year, the Producer Price Index increased by 11%, down from an 11.5% gain in March, according to the Bureau of Labor Statistics. Price increases slowed in April for energy as well as for transportation and warehousing. The core rate of wholesale inflation, stripping out volatile prices for food, energy and trade services, rose 0.6% for the month and 6.9% since April 2021. Both rates were lower than in March.

Friday

The University of Michigan said consumer sentiment declined sharply from the end of April as both expectations and current assessments fell across demographic and political lines. Feelings toward personal finances sank to the lowest level since 2013, with 36% of consumers citing high inflation. Their expectations for long-term inflation, though, remained steady at around 3%. Consumers reported the worst conditions for buying durable goods since the survey began asking the question in 1978.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11805, down 340 points or 2.8%

Standard & Poor’s 500 – 4024, down 99 points or 2.4%

Dow Jones Industrial – 32196, down 703 points or 2.1%

10-year U.S. Treasury Note – 2.94%, down 0.19 point

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