The markets closed lower last week as traders reacted to the possibility of additional tariffs from the U.S. government, the speculation about rising inflation, a weak earnings report from a major megacap company, and a lower-than-expected jobs report. Of all the major stock indexes, only the Global Dow managed to eke out a weekly gain. The remaining indexes closed lower, led by the Dow and the NASDAQ. Ten-year Treasury yields rebounded last Friday, but not enough to keep from ending last week lower. Crude oil prices declined nearly 3.5%, primarily due to increasing trade tensions, particularly with China.
Last Week’s Economic News
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- The Consumer Price Index rose in January, the largest one-month increase since August 2023. Over the last 12 months, consumer prices increased 3.0%, after rising 2.9% over the 12 months ending in December.
- Wholesale prices moved higher in January. According to the latest report, the Producer Price Index rose 0.4% last month following an upwardly revised December increase of 0.5%. Over the last 12 months, producer prices have risen 3.5%, the same increase as occurred for the 12 months ended in December.
- Retail sales, a measure of consumer spending, fell 0.9% in January but were up 4.2% from the previous year’s total.
- Prices for U.S. imports increased 0.3% in January after advancing 0.2% in December. Prices for U.S. imports advanced 1.9% from January 2024 to January 2025. U.S. export prices rose 1.3% in January following a 0.5% advance the previous month. The January increase was the largest monthly advance since May 2022. U.S. export prices increased 2.7% over the past year, the largest 12-month advance since the year ended December 2022.
- Industrial production (IP) increased in January after moving up also in December.
- The government deficit for January was $129.0 billion, $42.0 billion higher than the December deficit and $106.0 billion above the January 2024 deficit. Through the first four months of the fiscal year, the total deficit sits at $840.0 billion, over $300.0 billion higher than the cumulative deficit over the same period last year.
- The national average retail price for regular gasoline was $3.128 per gallon on February 10.
- For the week ended February 8, there were 213,000 new claims for unemployment insurance.
Eye on the Week Ahead
The housing sector is prevalent this week with the latest data on housing starts and existing home sales for January. December saw both housing starts and completions surge, while the number of issued building permits lagged. Sales of existing homes increased in December and were up over 9.0% from a year earlier.
Have a nice week!
Sincerely,
Robert G. Carpenter