Weekly Economic Update
Last Week and the Economy
Most of the major stock indices continued to fall last week. The Nasdaq Composite posted the largest drop at 3.47%, while the Russell 2k Small Cap Index fell by 1.47%. The S&P 500 also declined by 0.98% for the week. In international markets, the MSCI-EAFE Index continued the downward trend, falling by 0.84%. On the other hand, the Dow Jones Industrial Average rose by 0.95%.
PCE Inflation Rate Slowed Modestly
The Bureau of Economic Analysis released the January Personal Income and Outlays Report. It showed that Personal Consumption Expenditure [PCE] prices rose by 0.3% for the month and 2.5% from one year ago. The annual rate slowed by 0.1 percentage points from the previous month but remains above the Fed’s target of 2% inflation.
The report also showed that Americans earned 0.9% more in January, which was partially attributed to higher wages. On the other hand, consumers spent 0.2% less, reflecting a $76.7 billion decline in spending on goods which was partially offset by a $46.0 billion increase in spending on services.
Consumer Confidence Plummeted
A new report from the Conference Board showed that consumer confidence fell for the third consecutive month and experienced the largest monthly decline since August 2021. The data is divided into two categories – the Present Situation Index and the Expectations Index – both of which declined from the previous month.
Consumer assessments of the future economic situation dropped by 9.3 points to 72.9 – where a reading of 100 represents the 1985 baseline level. A reading below 80 typically signals a recession on the horizon.
Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, explained that inflation continues to be a point of interest for survey respondents. Responses showed that year-ahead inflation expectations rose sharply from 5.2% to 6% due to a number of factors including the price of eggs and the expected impact of tariffs.
New Home Sales Dropped
Two weeks ago, the National Association of Realtors reported that sales of existing homes declined by 4.9% in January. Then, a report from the Census Bureau last week showed an even steeper decline in sales of new construction homes.
The Census Bureau report announced a staggering 10.5% drop in sales of new homes from December to January. This decline was driven by significantly lower sales in the Northeast, Midwest, and South. On the other hand, sales rose in the West region.
Despite slower sales, prices rose substantially. The median sales price of a new home rose from $415,000 in December to $446,300 in January. Slower sales combined with higher prices have been a feature of the housing market for the past two years as high mortgage rates have made it difficult for some homebuyers to enter the market.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Key Economic Data Points
| Data Point | Date | Current | Change from Prior | Next Report |
| Unemployment Rate | 1-2025 | 4.0% | -0.1 | Mar 7th |
| FOMC Target Rate | 1-2025 | 4.25% – 4.50% | 0 | Mar 19th |
| GDP | Q4-2024 (revised) | 2.3% | -0.8 | Mar 27th |
| PCE Inflation | 1-2025 | 2.5% | -0.1 | Mar 28th |
Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed, U.S. Bureau of Economic Analysis
Weekly Quote:
Behind every stock is a company. Find out what it’s doing.
-Peter Lynch, Investor
The Week Ahead – Economic Data & Events
Monday: Construction, ISM Manufacturing, Multivariate Core Trend Inflation, R-Star (HLW Estimates)
Wednesday: ADP National Employment Report, ISM Non-Manufacturing, Manufacturing, Shipments, and Orders
Thursday: Productivity & Costs (Revised), Trade Balance, Global Supply Chain Pressure Index (GSCPI), Wholesale Trade
Friday: Employment Situation
Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Wednesday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday)
Source: New York Fed
The Week Ahead – S&P 500 Companies Reporting Earnings
Tuesday: AutoZone, Inc. (AZO), Best Buy Co., Inc. (BBY)
Wednesday: Ross Stores, Inc. (ROST), Campbells Company (CPB)
Thursday: Kroger Co. (KR)
Friday: Costco Wholesale Corporation (COST), Broadcom Inc. (AVGO), Cooper Companies, Inc. (COO), Hewlett Packard Enterprise Co. (HPE)
Source: Select Sector SPDRs Earnings Calendar
Weekly Tip:
Prioritize your saving based on the goals that will bring you the most long-term benefit.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
Join Us for Our Next Meld University Events:
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When: Tuesday, 3/11/25 from 3 – 4 PM CST
Where: Online Webinar
Speaker: Patricia L. Burris, CFP®
This event will cover the most important aspects of Social Security including filing strategies, taxation, and updates for 2025.
Transitioning to Medicare
When: Tuesday, 4/22/25 from 3 – 4 PM CST
Where: Online Webinar
Speaker: Patricia L. Burris, CFP®
Medicare webinar will cover Medicare enrollment, supplement plans, strategies for maximizing benefits, and 2025 program updates.
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Meld Financial will be hosting our 10th annual Shred-It event on April 26th to benefit the Children’s Hospital of Alabama.
Last Week's Riddle and Answer
Last Week's Riddle:
Where would you take a sick boat?
Last Week's Answer:
You’d take a sick boat to the dock-tor.
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