Housing Starts rebounded in April, rising 5.7% from March, though coming in lower than economists had forecasted. However, starts for single-family homes, which make up the bulk of homebuilding and are the most crucial due to buyer demand, were essentially flat at a 0.4% decline. There was a similar trend in future construction, with Building Permits moving lower despite much needed supply.

What’s the bottom line? While Housing Completions did rise in April, softer than expected construction activity this spring could limit much needed supply down the road. This bodes well for appreciation and shows that opportunities remain to build wealth through homeownership.

Confidence among home builders fell back below the key breakeven threshold of 50, per the National Association of Home Builders (NAHB), as their Housing Market Index dropped six points to 45 in May. Any score over 50 on this index, which runs from 0 to 100, signals that more builders view conditions as good than poor.

Among the three index components, current and future sales expectations both remain in expansion territory, but they fell sharply from April. The gauge judging buyer traffic also declined, remaining in contraction territory.

What’s the bottom line? NAHB’s Chair, Caril Harris, explained, “The market has slowed down since mortgage rates increased and this has pushed many potential buyers back to the sidelines.” He added that builders are concerned about some recent code rules that could lead to increased costs, which also impacted sentiment overall.

The Producer Price Index (PPI), which measures inflation on the wholesale level, rose 0.5% in April, coming in hotter than estimates. Core PPI, which strips out volatile food and energy prices, was also above forecasts at a 0.5% rise.

What’s the bottom line? On the surface, these monthly figures looked like a significant rise in monthly wholesale inflation, but a deeper dive into the data tells a different story. Revisions to the previous report for March showed inflation was tamer than initially reported for that month, with both the headline and core readings revised lower from 0.2% to -0.1%. That’s a huge difference!

Plus, the year-over-year figures (2.2% headline and 2.4% core) came in as expected and in line with what the Fed wants to see, meaning the report wasn’t as concerning as the headline figures suggested.

The latest Consumer Price Index (CPI) showed cooler than expected inflation in April, with the headline reading up 0.3% from March versus the forecasted 0.4% rise. On an annual basis, CPI eased from 3.5% to 3.4%, which was a move lower in the right direction following the uptick in March. The Core measure, which strips out volatile food and energy prices, increased 0.3% while that annual reading declined from 3.8% to 3.6%.

Rising shelter, gas and motor vehicle insurance costs were key reasons for the pricing pressure that was seen last month.

What’s the bottom line? The Fed has been working hard to tame inflation, hiking its benchmark Fed Funds Rate (which is the overnight borrowing rate for banks) eleven times between March 2022 and July 2023. These hikes were designed to slow the economy by making borrowing more expensive, so the demand for goods would be lowered, thereby reducing pricing pressure and inflation.

While inflation was making good progress lower late last year, readings throughout the first quarter of this year were unexpectedly high, causing the Fed to hold the Fed Funds Rate steady as they take a more patient approach to cuts than initially thought. April’s cooler than expected readings were a welcome sign that inflationary pressures may continue to ease as we move further into the year.

We’ll see crucial readings on inflation when the Producer and Consumer Price Indexes for April are reported on Tuesday and Wednesday, respectively.

Key housing data will also be delivered, starting with this month’s builder confidence reading from the National Association of Home Builders on Wednesday. April’s Housing Starts and Building Permits follow on Thursday.

Also of note, look for April’s Retail Sales on Wednesday and the latest Jobless Claims on Thursday.

May 15 marks National Chocolate Chip Day and is the perfect reason to enjoy these Chocolate Chip Muffins courtesy of Food.com. Yields 12 muffins.

Preheat oven to 400 degrees Fahrenheit. Grease 12 muffin cups or spray with baking spray.

In a large bowl, stir together 2 cups all-purpose flour, 1/3 cup packed light brown sugar, 1/3 cup sugar, 2 teaspoons baking powder, and 1/2 teaspoon salt. In another bowl, stir together 2/3 cup milk, 1/2 cup butter (melted and cooled), 2 eggs (lightly beaten), and 1 teaspoon vanilla until blended.

Make a well in the center of the dry ingredients and add milk mixture, stirring to just combined. Stir in 1 bag of chocolate chips and 1/2 cup of chopped walnuts or pecans.

Spoon batter into prepared tin and bake for 15-20 minutes until a cake tester inserted in the center of a muffin comes out clean. Place muffin tin on a wire rack and cool for 5 minutes before removing muffins to finish cooling.

The most recent consumer spending data for March was strong (Core Retail Sales up 1.1% and Personal Spending up 0.8%), aided by pandemic savings from stimulus and credit. But there are signs this support may be coming to an end.

A recent article by San Francisco Fed analysts revealed that “American households fully spent their pandemic-era savings as of March 2024.” Meanwhile, credit card debt hit a new record high in the fourth quarter of last year, with balances reaching $1.13 trillion, according to the New York Fed’s Quarterly Report on Household Debt and Credit.

We’ve also seen a growing popularity in Buy Now Pay Later (BNPL) programs, which allow people to purchase something immediately and pay off the balance in equal installments. But BNPL options are also now showing signs of stress.

A recent survey conducted for Bloomberg News by Harris Poll found that 43% of those who owe money to BNPL programs were behind on their payments. Also, within the survey, it was shown that more than 50% said they bought more than they could afford, and over one third said they turned to these programs after maxing out their credit cards. Meanwhile, 24% said their BNPL spending was “out of control.”

What’s the bottom line? Consumer spending makes up 70% or so of GDP, so a slowdown would be significant and could point to a slower US economy, weaker inflation, and lower rates. While this will take time to come to fruition, it will be important to analyze upcoming data for signs of softer spending.

Initial Jobless Claims rose by 22,000 in the latest week, reaching their highest level since last August, as 231,000 people filed for unemployment benefits for the first time. Continuing Claims also rose 17,000, with 1.785 million people still receiving benefits after filing their initial claim.

What’s the bottom line? The jump in Initial Jobless Claims is a breakout for this metric, as it has been extremely stable at low levels for the last several months (ranging from 208,000 to 213,000 in nine of the last ten weeks before this latest report). Continuing Claims are also still trending near some of the hottest levels we’ve seen in recent years.

This data follows other recent reports that also suggested softening in the labor sector, such as weaker than expected job growth in April, declining job openings, and the low quit rate.

CoreLogic’s Home Price Index showed that home prices nationwide rose a strong 1.2% in March after rising 0.7% in February, showing that home price appreciation is not just continuing – it’s accelerating. Prices are also 5.3% higher when compared to March of last year.

CoreLogic forecasts that home prices will rise 0.8% in April and 3.7% in the year going forward, though their forecasts are typically on the conservative side so we may see even greater levels of appreciation. For example, CoreLogic had forecasted that prices would rise 0.4% in March, and last week’s report showed we tripled that amount. They had also forecasted that we would see 3% appreciation in 2023 but we saw 5.5%.

Black Knight also reported that national home values rose 1.2% in March, with their index showing that prices are 5.6% higher than a year ago.

What’s the bottom line? The latest rise in home prices reported by CoreLogic and Black Knight echoes the strong growth seen by other major indices like Case-Shiller and the Federal Housing Finance Agency. These reports continue to demonstrate why homeownership remains a good opportunity for building wealth through real estate.

ADP’s Employment Report showed that private payrolls rose more than expected in April, led by another boost from the leisure and hospitality sector. Employers added 192,000 new jobs versus the 175,000 that had been forecasted, while job growth in February was also revised higher by 24,000 jobs.

What’s the bottom line? ADP’s Chief Economist, Nela Richardson, noted that “hiring was broad-based in April” with only the information sector posting losses. Growth among small businesses remained muted, however, as businesses with fewer than 50 employees added 38,000 jobs, versus 160,000 new jobs added among medium and large companies combined. Annual pay gains for job stayers have been decelerating, with ADP reporting an average increase of 5% in April versus 5.1% in March. Job changers saw an average increase of 9.3% and while this was a decline from 10.1% in March, it’s above the levels seen at the start of the year.

It’s National Strawberry Month! This Strawberry Granola Parfait courtesy of Good Housekeeping makes for a delicious breakfast, snack or even dessert. Yields 1 parfait.

In a 3-quart saucepan, cook 1 pound hulled strawberries, 3/4 cup sugar, 1/2 teaspoon cinnamon, and 1/2 teaspoon lemon peel on medium until strawberries are soft but still red, stirring, about 8 to 10 minutes. Transfer to a blender and puree until smooth. Stir in 1/2 teaspoon vanilla and 1 tablespoon lemon juice.

In an 8-ounce jar, add 1/2 cup granola, 1/2 cup yogurt, and the strawberry coulis in layers. Garnish with strawberries. Enjoy immediately or seal and refrigerate overnight for the next day.

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.4% from January to February after seasonal adjustment. Home values in February were also 6.4% higher than a year earlier, which is the fastest annual rate since November 2022. The Federal Housing Finance Agency’s (FHFA) House Price Index also reported a 1.2% jump in home prices from January to February, with prices 7% higher than the previous year. Note that FHFA does not include cash buyers or jumbo loans, and these factors account for some of the differences in the two reports.

What’s the bottom line? S&P DJI’s Head of Commodities, Brian D. Luke, confirmed that national home prices are “at or near all-time highs” with all 20 cities in their composite index once again posting annual price increases. Home values are expected to remain supported this year, as buyer demand still outpaces tight supply. These indexes show that homeownership remains a fantastic opportunity for families to create wealth through appreciation gains.

Initial Jobless Claims were flat in the latest week, as 208,000 people filed for unemployment benefits for the first time. Continuing Claims also held steady, with 1.774 million people still receiving benefits after filing their initial claim.

What’s the bottom line? The low level of Initial Jobless Claims suggests that employers are still trying to keep their workers. Yet, Continuing Claims are still trending near some of the hottest levels we’ve seen in recent years, as challenges remain for job seekers searching for their next position.

The latest Job Openings and Labor Turnover Survey (JOLTS) showed that job openings contracted to 8.488 million in March, down from 8.813 million in February and well below estimates. The hiring rate fell from 3.7% to 3.5%, while the quit rate fell from 2.2% to 2.1%.

What’s the bottom line? Job openings have reached their lowest level since March 2021, and are now well below the high of 12 million hit in 2022, suggesting some softness in the labor sector. Plus, the quit rate is at the lowest level since 2018 other than COVID. This also shows some labor sector weakness, as a lower quit rate suggests less poaching from other companies and fewer people feeling confident about finding new employment.