Wall Street closed last week with mixed results. The Nasdaq and the Russell 2000 closed lower, while the Dow, the S&P 500, and the Global Dow edged higher. Several big banks kicked off third-quarter earnings season with upbeat returns, which helped quell concerns over the developments in the Middle East. Inflation continued to prove stubborn, with data from September showing prices rose more than expected. Ten-year Treasury yields declined, while crude oil prices jumped over concerns about the potential impact of the Middle East conflict and tightened sanctions by the United States on sales of crude to Russia. Some analysts fear that the escalating struggle between Israel and Hamas might lead to soaring crude oil prices topping $150 per barrel to the detriment of global economic growth — possibly, not a good environment for stocks.
Last Week’s Economic News
- The Consumer Price Index rose in September, after climbing some in August. Over the last 12 months, the CPI increased 3.7%, the same increase as the 12 months ended in August.
- The prices producers received for goods and services rose in September from the previous month. Producer prices advanced 2.2% for the 12 months ended in September, the largest increase since moving up 2.3% for the 12 months ended in April.
- Prices for U.S. imports ticked up 0.1% in September following a 0.6% advance the previous month. Higher fuel prices drove the September increase. Import fuel prices advanced 4.4% in September, after rising 8.8% in August. Import fuel prices have not recorded a one-month decline since May 2023. Prices for nonfuel imports decreased 0.2% for the second consecutive month in September. Despite the recent increases, prices for U.S. imports declined 1.7% for the year ended in September. U.S. export prices rose 0.7% in September after advancing 1.1% in August. Prices for agricultural exports fell 1.1% in September after decreasing 2.1% the previous month. Prices for nonagricultural exports rose 1.0% in September following a 1.5% increase the previous month. Prices for U.S. exports decreased 4.1% over the past year. The 12-month drop in September was the smallest 12-month decline since February 2023.
- The national average retail price for regular gasoline was $3.684 per gallon on October 9, $0.114 per gallon lower than the prior week’s price and $0.228 less than a year ago.
- For the week ended October 7, there were 209,000 new claims for unemployment insurance, unchanged from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended September 30 was 1.1%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended September 30 was 1,702,000, an increase of 30,000 from the previous week’s level.
Eye on the Week Ahead
This week includes the release of data on retail sales for September. Consumer spending at the retail level has been steady so far this year, with sales increasing 0.6% in August. The Federal Reserve’s report on industrial production for September is available this week. August saw industrial production increase 0.4%, although manufacturing output only ticked up 0.1%. Housing data is out this week with the release of the report on housing starts and building permits. Building permits increased 6.9% in August, while housing starts dipped 11.3%. September data on existing home sales is released at the end of this week. Rising interest rates and a dearth of inventory have caused sales of existing homes to fall 15.3% from a year earlier.
Have a nice week!
Sincerely,
Robert G. Carpenter