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This morning, there was a conversation in the office around the best breakfast cereal from when we were younger. There’s a lot of nostalgia. The stock market is probably feeling pretty nostalgic for a time pre-Brexit, before the trade negotiations and before coronavirus. It seems like it’s been one thing after another for a while now.

A certain leprechaun used to talk about the luck of stars, rainbows, clovers and horseshoes. Maybe the world’s economies will have their luck looking up this week.

Headline News

Here’s the latest in economic data with summary assistance provided by Econoday.1

MBA Mortgage Applications

Mortgage applications were up 1.1% overall and 5% on the refinance side, according to the Mortgage Bankers Association. On the downside, purchase applications fell 6%. However, it’s up 16% on the year.

The average interest rate on a 30-year fixed mortgage was up a single basis point to 3.71% with 0.28 points paid and 20% down.

Consumer Price Index

Prices on the consumer side of things are up 0.1% for the month and 2.5% overall in January. When food and energy were removed, these were up 0.2% and only 2.3% on the year.

Looking at key categories, the cost of shelter was up 0.3% in January and 3.3% on the year. According to this metric, the cost of rent is higher than the cost for homeowners at 0.4% and 0.3%, respectively. Rent was up 3.8% on the year while homeowner costs have only risen 3.3%.

The cost of medical services was up 0.3% in January and 5.1% overall. Health insurance seems to be the main driver of these cost increases, up 20.5% on the year after rising 1.7% in January. In contrast, the cost for doctor services were up only 0.7% annually after falling 0.4% on the month.

Prices for used vehicles dropped and new vehicle prices were flat in January. Also dropping was the price of auto insurance. Airline fares were up 0.7%. Prices were up 0.2% and 1.8% on the year. Meanwhile, energy prices fell 0.7% on the month and are down 6.2% year-to-year. Gasoline prices fell and that has a lot to do with it.

Jobless Claims

Initial jobless claims were up 3,000 last week to come in at 205,000. Meanwhile, the 4-week average was flat at 212,000.

On the continuing claims side, these were down 61,000 to 1.698 million. Finally, the 4-week average of continuing claims fell 17,500 to about 1.727 million.

Retail Sales

Retail sales were up 0.3% on the month overall and also match this amount when cars and trucks were taken out. Further removing gas, sales were up 0.4%. On the downside, a control group which removes automobiles, gas as well as food and building materials was unchanged, which missed expectations.

Sales and building materials were up 2.1% in January, and food service sales were up 1.2%. General merchandise stores saw sales rise 0.5%, while furniture stores had a 0.6% increase. There was a 0.3% increase in e-commerce and catalog sales while car sales were up 0.2%.

On the opposite end of things were clothing stores, down 3.1%, and health and personal care, which fell 0.4%. Finally, electronics and appliance stores and gas stations both saw sales drop 0.5%.

Industrial Production

Overall industrial production was down 0.3% on the month, but the good news here is that was expected. The weather has been warmer in recent months than it normally is, but that also causes a drop in utility production. Also weighing down things is a lack of production for Boeing’s 737 Max. The company is still working to convince regulators on the safety of the plane after two fatal crashes last year.

Utility production was down 4% last month. Meanwhile, mining output was up 1.2% to begin the year and is up 3.1% from last January. Manufacturing was down 0.1%, but would have been up 0.3% if you exclude the 737 problems.

There are other indications that this report isn’t that great. Machinery production was down 1.1% for the month. Manufacturing is down 0.8% year-to-year. There was 0.3% less space being utilized in factories in January as well, settling at 76.8%

Consumer Sentiment

Consumer sentiment was up 1.1 points to 100.9 overall in preliminary readings for February. There was an uptick in the outlook for expectations and a bit of a downturn in current conditions.

Over the next year, consumers expect inflation to remain unchanged at 2.5%, while remaining only at 2.3% over the next 5 years, a reading that’s down 0.2%.

Mortgage Rates

Mortgage rates have remained mostly unchanged near 5-year lows, according to Freddie Mac. If you’re in the market to purchase a home or refinance your mortgage, it remains a good time to lock your rate.

The average rate on a 30-year fixed mortgage with 0.7 points paid in fees was up a couple of basis points to 3.47%. This is down from 4.37% a year ago.

Meanwhile, looking at shorter terms, rates were flat on 15-year mortgages, averaging 2.97% with 0.8 points paid. This has fallen from 3.81% last year.

Finally, the average rate on a 5-year adjustable rate mortgage with 0.3 points paid was down four basis points to 3.28% last week. This is a drop from 3.88% at the same time last year.

Stock Market

It was a bit of an unusual day on the stock market. On one hand, the coronavirus and its economic effects continued to be a hot topic Friday. As of Friday, the Chinese national health commission added 121 additional deaths, but they also removed 108 fatalities, blaming the error on double counting. There were 5,090 new cases confirmed. While digesting that news, stocks also bounced up a little bit on the fact that the Trump administration is reportedly looking at tax incentives aimed at encouraging people to buy stock.

The Dow Jones Industrial Average was up 1.02% on the week despite falling 25.23 points Friday to close at 29,398.08. Meanwhile, the S&P 500 finished up 6.22 points on the day at 3,380.16, rising 1.58% week-to-week. The Nasdaq closed Friday at 9,731.18, up 2.21% for the week and 19.21 points on the day.

The Week Ahead

Monday, February 17

It’s Presidents Day. While Quicken Loans® is open, many banks and the stock market are closed along with several other businesses. Don’t look for any mail today.

Tuesday, February 18

Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders (NAHB®) produces a housing market index based on a survey in which respondents from the organization are asked to rate the general economy and housing market conditions. The index is a weighted average of separate diffusion indexes, including present sales of new homes, sales of new homes expected in the next 6 months and traffic of prospective buyers in new homes.

Wednesday, February 19

Housing Starts (8:30 a.m. ET) – A housing start is registered when the construction of a new residential building begins. The start of construction is defined as the beginning of excavation of the foundation for the building.

Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in prices received by domestic producers for the sale of goods and services.

Thursday, February 20

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The 4-week moving average of new claims smooths out weekly volatility.

Friday, February 21

Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops that were sold during the month. Existing homes (also known as “home resales”) account for a larger share of the market than new homes and indicate housing market trends.

There’s not a ton on the calendar this week, but we get a lot of housing data. It’ll all be covered for you in next week’s Market Update!

If this post isn’t the perfect complement to your Monday afternoon caffeine jolt, you can read our much less dry home, money and lifestyle content by subscribing to our mailing list below. As an example, did you know that chartreuse home decor is all the rage this year. I didn’t, either. But we’ve got a really cool article about it. Have a great week!

1Important Legal Notice: Econoday has attempted to verify the information contained in this calendar. However, any aspect of such information may change without notice. Econoday does not provide investment advice, and does not represent or warrant that any of the information is accurate or complete at any time. Copyright 2020 Econoday, Inc. All rights reserved.

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