All posts tagged: Mortgage Rates

The inflation data scheduled for this week has been pushed back by one week. The unemployment data was the only impactful economic report released this week. Across the board, unemployment statistics came in within expectations, while wage increases were slightly below expectations. Historically, wages have lagged behind inflation, making both unemployment and wage growth strong barometers of the economy’s overall health. Despite the current state of affairs, the economy appears to be holding strong, as reflected across the broader markets.

The latest Trade Balance data has shown that despite the rigorous action involved with tariffs, it has had little impact on adjusting the trade balance amongst the US and other countries. The imbalance has gone the other direction — becoming worse — the last 3 releases alone.

A relatively light week given recent events, with the only notable releases being Consumer Sentiment and Retail Sales. Consumer Sentiment has broken its recent downtrend, ticking up slightly. However, in the face of rising gas prices and increasing costs of living, this may shift in the next release. Retail Sales have also shown a positive uptick, indicating that the economy remains resilient despite ongoing global events.

With the full release of all the data for PPI and CPI–albeit delayed–we now have a clearer picture that the recent wars have pushed inflation to a three-year high.

The core CPI and PCE data have been released, leaving only the non-core CPI data delayed. Amid the Iran war, inflation has once again risen to higher levels, with most sectors seeing widespread price increases due to higher fuel and energy costs. As fuel costs rise, there is a knock-on effect across other consumer products as well. However, inflation has remained within expectations when considering the impact of the war.

With the continued delay in the CPI and PCE inflation data, this week’s headlines will focus on unemployment figures. Job reports show an increase of 178,000 workers, though this growth is unlikely to persist given the current state of the economy. Unemployment data has also shown a positive release, reflecting a slight decrease from the previous report.

With the current state of affairs, it is not surprising that a majority of the releases scheduled for this week have been delayed until next week. The only notable report set to be released is the consumer sentiment report, which has been showing month-to-month declines. This has led to a very light week, with a heavy slate of inflation data scheduled for release next week. The PCE Index and CPI are both scheduled for next week.

While delayed, the Producer Price Index has indicated that the war in Iran has pushed producer prices to new highs, as oil prices have surged amid the conflict, coming in at more than double the expected value. It is unlikely we will see prices recede, even if there is a quick resolution. There will be long-term impacts that continue to keep gas prices elevated until then.

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.

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.