It was kind of a dreary weekend here in Detroit. For the last several days, it’s been nothing but rain and chilly temps. It should not be 38 degrees on April 16, but maybe that’s just my opinion!
The stock market hasn’t done all that great recently, either. Would it rebound? We know the Federal Reserve is keeping an eye on inflation. How were prices last month for producers and consumers? Let’s jump right in.
Headline News
Producer Price Index (PPI)
Inflation at the producer level (for the people who make the goods and services) came in at 0.3% in March, beating expectations for a 0.1% gain. Inflation is now up 3.0% on the year overall.
When food and energy are taken out of the equation, the monthly gain was matched, and there’s a 2.7% increase in prices on the year. Finally, when trade services are further removed, prices were up 0.4% and 2.9% yearly.
Steel was a big driver in price increases, with mill products up 1.9% and scrap costs up 4.3%, which analysts are saying is the initial effect of recent tariffs on these products signed by the president.
There was also a 2.2% jump in the cost of food. The gain was offset by a 2.1% drop in energy costs. Finally, trade services were only up 0.2% and 2.0% annually.
MBA Mortgage Applications
Despite the average 30-year-fixed mortgage rate for conforming mortgages falling three basis points to 4.66% in this data, overall applications were down 1.9% on the week. Both purchase and refinance applications were down 2.0%.
Another interesting point in the data: The number of people looking to refinance continues to drop, representing just 38.4% of overall applications. Rates have increased since last year, and those who are refinancing are largely looking to take cash out of their homes.
Consumer Price Index (CPI)
Consumer prices are down 0.1% in contrast to things on the producer side in the month of March. However, they’re about where the Fed would like to see them, up 2.4% on the year. When food and energy are taken out, they’re up 2.1% on the year and 0.2% on the month.
Analysts say the uptick in the yearly inflation rate has to do with cell phone service payments, which started to drop quite a bit at this time last year.
Turning to individual categories, the price of energy was down 2.8% as gasoline prices fell 4.9%. Prices rose only 0.1%. Apparel prices fell 0.6%, and education and communications prices were down 0.2%.
The cost of medical care did go up 0.4%, as dental services pricing jumped 1.2%. There was a 0.3% monthly gain for both the overall cost of housing and owners’ equivalent rent, which measures what it would cost if homeowners were to rent out a similar house rather than owning it.
Jobless Claims
Initial jobless claims were down 9,000 to 233,000 last week. This puts the four-week average of continuing claims up just slightly, rising 1,750 to come in at 230,000.
On the continuing claims side, there were 53,000 claims added, which brought the total to 1.871 million. However, the four-week average was down 2,000, settling at 1.850 million.
Analysts point out that because of the Easter holiday, initial claims may not be the most accurate.
Consumer Sentiment
Consumer sentiment came in at 97.8 overall in the first reading of April, down 3.6 points from the end of March. The expectations index was down 1.2 points to 86.8 points. However, the bulk of the drop comes from the current conditions portion of the report. This was down more than six points to 115.0, and analysts are worried about what that means for jobless claims and consumer spending.
Inflation expectations are down 0.1% on the month for both the one- and five-year outlook, at 2.7% and 2.4%, respectively.
Mortgage Rates
Mortgage rates didn’t move too much in any direction last week. They’re still lower than they were about a month ago at this time. If you’re looking to buy or refinance and see a rate you like, don’t hesitate to get it locked.
The average rate on a 30-year-fixed mortgage was up two basis points to 4.42% with 0.4 points in fees. At the same time last year, the average rate was 4.08%.
In shorter-term loans, the average rate on a 15-year fixed was unchanged for the week at 3.87% with 0.4 points. A year ago, this rate was 3.34%.
Finally, the average rate on a 5-year treasury-indexed hybrid adjustable rate mortgage was down a single basis point to 3.61% with 0.3 points. Last year, the rate was 3.18%.
Stock Market
Despite bank stocks pulling the indexes down Friday, it was largely a rebound week for the market.
The Dow Jones industrial average was down 122.91 points on the day to close at 24,360.14, up 1.79% on the week. The S&P 500 was up 1.99% on the week, despite being down 7.69 points on the day to close at 2,656.30. Finally, the Nasdaq finished the day at 7,106.65, up 2.77% on the week, despite being down 33.60 points on the day.
The Week Ahead
Monday, April 16
Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.
Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey where 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 six months and traffic of prospective buyers in new homes.
Tuesday, April 17
If you haven’t done them already, taxes are due today.
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.
Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production – and the related capacity indexes and capacity utilization rates – covers manufacturing, mining, and electric and gas utilities.
Wednesday, April 17
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Thursday, April 18
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to report the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
All the major data points are loaded toward the front half of the week with retail sales, housing starts and industrial production to look forward to. We’ll have it all covered in next Monday’s update.
If mortgage rates and economic news aren’t getting you where you need to be to start the week mentally, I get wanting to hit the snooze button. Thankfully, we have plenty of other home, money and lifestyle content we can share if you subscribe to the Zing Blog below.
This should spice things up. We partnered with Marvel’s upcoming release of Avengers: Infinity War. Our blog team has been very excited to do some super cool content around our favorite heroes. I’ll be sharing some of these in the coming weeks. To get things started, check out these awesome Avengers decor pieces. Have a great week!
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