Check the latest inflation, jobs numbers and more

Headlines on Friday heralded a healthy jobs market as a report said employers added 272,000 new jobs in May. Those new workers exceeded economists’ projections by thousands of jobs.

But the Reports can be made from the Bureau of Labor Statistics The unemployment rate rose to 4% for the first time in more than two years. It ended the best sub-4% run since the peak of US military involvement in Vietnam.

That begs the question: What will Fed Chair Jerome Powell and the rest of the Fed’s policymaking team do about the conflicting directions of the two employment numbers this week?

Will the Fed cut interest rates this week?

We’ll learn more on Wednesday after the Fed announces its latest interest rate decision. Almost no one predicted that the central bank would cut rates CME FedWatch tool.

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Jobs, of course, is only one part of the economic data the Fed will discuss on Tuesday and Wednesday. We’ve collected statistics from nine other key views of the economy that provide insights into its direction and what we as consumers are feeling.

The charts below aren’t as detailed as the Fed officials will review this week, but they provide interesting insights into the direction of the economy. They include the Consumer Price Index. It’s not the Fed’s preferred view of inflation, but the May report will be released on Wednesday morning and will be the key data point, if not the talking point for the day.

How is the US economy doing?

Let’s take a quick look at most of the data we’ve collected and listed below. Apart from job growth and consumer sentiment, most of these indicators do not suggest strong economic growth.

What is the unemployment rate in the United States?

The US unemployment rate rose to 4% in May. The monthly number, which indicates the percentage of people looking for work without a job, was 3.9% in April.

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What the data shows: The unemployment rate is slowly rising, which could mean employers are pulling back on hiring. However, this rate is below the 10-year monthly average rate of 4.3%. The job market was on a similar roll in 2020 before the pandemic put millions out of work.

How big is the US economy?

In the first quarter of 2024, the U.S. economy produced $22.7 trillion in goods on an inflation-adjusted annual basis. This raises GDP by 1.3% from the fourth quarter of 2023 – revised up from 1.6% recently.

What the data shows: The U.S. economy is still growing, but its pace slowed faster than initially thought in the first quarter. Some have speculated that the Fed’s rate hikes will begin to weigh on businesses and consumers, but GDP was almost halved in the first quarter Because Americans buy from foreign manufacturers.

How high is inflation?

Inflation, the sustained increase in prices across the economy, has been above the 10-year average of 2.1% for more than three years. Central bank policymakers say they want to Inflation is 2%, or “low and steady,” so we can “make sound decisions about saving, borrowing, and investing.”

What the data shows: Inflation has slowed significantly over the past two years, but remains above the central bank’s target of 2%. The US inflation rate for the year, as measured by the Consumer Price Index, eased to 3.4% in April from 3.5% in March. The May CBI report released Wednesday at 8:30 am.

Are consumers still making purchases?

American consumers account for $7 of every $10 spent in the U.S. economy. The average monthly increase in retail sales over the past 10 years has been 0.3%. That doesn’t sound like much until you consider that a 0.1% increase in November would cost an additional $730 million.

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What the data shows: As the primary engine of the US economy, we bought $705 billion worth of goods in April on a seasonally adjusted basis. This was unchanged from March. If the consumer retreat continues, GDP will continue to lag in the second quarter.

Why are gas prices falling?

Most of our budgets don’t include buying gasoline, but it’s hard to miss the big numbers outside each station and not be emotionally moved by their swings. It can have a psychological effect on our spending. A report showed that a Recent progress in consumer sentiment Closely related to lower gas prices.

What the data shows: We’re approaching the summer driving season, where gasoline prices are typically at their peak, but since late April, a gallon of regular gas has dropped by nearly a quarter. with Summer-blended gasoline and increased driving According to NerdWallet, in the coming weeks, prices may rise again.

How confident are American consumers right now?

The University of Michigan measures US consumer sentiment on a monthly basis. It was 101 before the pandemic in February 2020 and 50 in June 2022 when inflation rose to 9.1%.

What the data shows: Consumer sentiment has been steadily rising since May 2023. With inflation hovering above 3% and the central bank maintaining its interest rates in a range of 5.25-5.5, it is not surprising that little has been changed in recent months.

Current mortgage rates are still inflated

While the Fed’s interest-rate decisions don’t directly affect mortgage rates, they create ripples through the economy and make the math more difficult for homebuyers. In the fall, mortgage rates nearly doubled to 3.95% — the 10-year average reported by Freddie Mac. At 7.79% peak, new buyers pay $2,877 plus interest on a $400,000 mortgage. Bank’s mortgage calculator. That’s $1,000 more than you paid on a similar mortgage before the Fed began to fight inflation.

What the data shows: Mortgage rates have risen since the start of the year and are above the 10-year average. Rates have fallen significantly from November’s peak to below 7% Freddie Mac’s weekly mortgage rate survey. Lawrence Yun, chief economist for the National Association of Realtors, said Friday that he expects „mortgage rates to average around 7% for at least another month.”

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Higher mortgage rates weigh on home sales

Existing home sales account for the lion’s share of homes sold each month. NAR reports each month’s sales at a seasonally adjusted annual rate. Annual home sales rose to 7.08 million units in 2005. In 2023, that number will drop to 4.09 million units — less than sales in any year since the financial crisis.

What the data shows: Not surprisingly, existing home sales have fallen as mortgage rates have risen. At the same time, average home prices are also rising because fewer homes are on the market. There is speculation that homeowners are unwilling to sell and pay off their low-rate mortgages. „The pace of price increases should slow as more housing inventory becomes available,” Yun said following the April housing report.

How do investors view this information?

A country’s stock markets are not the economy, but their movements reflect the integrated challenges investors make in the economy. Investors pay close attention to data points like those in the table above. Significant changes in our spending, or even our thinking, could affect corporate profits in future quarters.

What the data says: The S&P 500 bottomed out in October 2022 as concerns about a recession spurred by the Fed’s interest rate campaign eased. Continued strong economic data — job growth and low inflation — helped drive a softer optimism. Landing is more likely. The index rose nearly 2% last week ahead of the central bank’s interest rate decision.

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