Jobless Claims

With the release of the delayed PCE and CPI inflation data reports, the Federal Reserve has chosen to stick to its resolve and maintain the current interest rates. It remains to be seen whether this will result in maintaining them or even increasing rates, as reports have shown that inflation is remaining sticky for the average consumer. This has been exacerbated by the ongoing conflicts with Iran, which have pushed gasoline prices higher.

There is some speculation that the Federal Reserve may walk back a rate hike in order to combat this ongoing stubborn inflation, but there is little sign of that yet. Consumer sentiment has also been shown to be dropping, as prices from the conflicts in Iran have impacted consumers.

Consumer Price Index
Consumer prices rose at a modest pace in February in a report that normally would be well received by investors, but the conflict with Iran has raised oil prices and it threatens to undo the recent progress in lowering the rate of inflation. The consumer price index increased 0.3% last month, matching the Wall Street forecast.

PCI Index
Federal Reserve officials have grown more worried about sticky inflation in the past few months, and the central bank’s favorite price gauge shows why. Prices rose briskly in January and are on track to increase sharply in February. The personal consumption expenditures price index rose 0.3% in January, the government Friday, in a report delayed a few weeks by recent federal shutdowns. The increase matched the Wall Street forecast.

Consumer Sentiment
Federal Reserve officials have grown more worried about sticky inflation in the past few months, and the central bank’s favorite price gauge shows why. Prices rose briskly in January and are on track to increase sharply in February. The personal consumption expenditures price index rose 0.3% in January, the government Friday, in a report delayed a few weeks by recent federal shutdowns. The increase matched the Wall Street forecast.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.07%, with the current rate at 5.50%
• 30-Year FRM rates saw an increase of 0.11%, with the current rate at 6.11%

MND Rate Index

• 30-Year FHA rates saw an increase of 0.15%, with current rates at 5.87%
• 30-Year VA rates saw an increase of 0.15%, with current rates at 5.89%

Jobless Claims
Initial Claims were reported to be 213,000 compared to the expected claims of 215,000. The prior week landed at 215,000.

What’s Ahead
The delayed Consumer Spending report is scheduled for release next week. Aside from that, it is expected to be a relatively light week for economic data.

The inflation data for CPI and the PCE Index was intended to be released this upcoming week, but it has been delayed until the following week. Given that, the most important data for this week was the Jobs Report, which includes important figures such as the amount of job growth and wage gains in proportion to inflation.

This release has shown a rather dismal result in job growth, showing near-zero job gains—a major reduction compared to the previous two years during the same period. This is also followed by wage gains that have lagged behind inflation for a long time. This could spell significant issues when considering tariffs and inflation.

This will put a lot of pressure on the Federal Reserve regarding whether to continue cutting rates in light of the more recent data releases.

Jobs Report
The U.S. labor market shrunk by 92,000 non-farm payroll jobs in February, as reported by the Bureau of Labor Statistics (BLS), well below economist estimates of an addition of 55,000. Additionally, the unemployment rate rose to 4.4% while average hourly wages grew by 0.4% month-over-month and 3.8% year-over-year.

Retail Sales
Sales at U.S. retailers fell in January for the first time in three months as Winter Storm Fern depressed spending at car dealers, gas stations and brick-and-mortar stores. Retail sales slid 0.2% in the first month of the year, the government said Friday. The report had been delayed by recent lapses in federal funding.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.01%, with the current rate at 5.43%
• 30-Year FRM rates saw an increase of 0.02%, with the current rate at 6.00%

MND Rate Index

• 30-Year FHA rates saw an increase of 0.10%, with current rates at 5.72%
• 30-Year VA rates saw an increase of 0.10%, with current rates at 5.74%

Jobless Claims
Initial Claims were reported to be 213,000 compared to the expected claims of 215,000. The prior week landed at 213,000.

What’s Ahead
Next week, the delayed CPI and PCE data is scheduled to be released, along with a rate decision by the Federal Reserve. This is an unusual combination, as inflation data has typically been released prior to the rate decision.

The release schedules of both the PPI and CPI have landed in the same week, but recently they have been shifted off kilter, with the PPI set to release the prior week. Limited information from the Core PPI—which came in higher than expected—was released, with the full data release delayed and likely to be published alongside the CPI data. Outside of these two releases, the unemployment data that was set to be released this week has also been delayed and is now due next week. This leaves Consumer Confidence as the only major release, which broke a six-month downtrend, showing a more positive reception this time around.

Consumer Confidence
For months, economists have been worried that the U.S. was on the cusp of a recession, with a weak labor market despite relatively stable economic growth. The feeling was that a “low-hire, low-fire” economy could quickly deteriorate into more layoffs. Workers would then have trouble finding new work, leading to a sharp uptick in the unemployment rate and an economic downturn.

Core PPI (Only)
The cost of wholesale goods and services rose at an accelerated pace in January for the second month in a row, suggesting persistent inflation could dog the economy at least through the early part of the new year. Producer prices rose 0.5% in January, according to an index published by the government. It was the biggest increase in four months and topped the 0.3% Wall Street forecast.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.09%, with the current rate at 5.44%
• 30-Year FRM rates saw a decrease of -0.03%, with the current rate at 5.98%

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.01%, with current rates at 5.62%
• 30-Year VA rates saw a decrease of -0.01%, with current rates at 5.64%

Jobless Claims
Initial Claims were reported to be 212,000 compared to the expected claims of 215,000. The prior week landed at 208,000.

What’s Ahead
The Consumer Price Index, Unemployment Data, and the rest of the Producer Price Index data is set to be released in the following week.