Retail Sales fell 0.8% from December to January, coming in well below forecasts and breaking a two-month streak of increases. Sales were 0.6% higher when compared to January 2023.

What’s the bottom line? After a strong holiday shopping season, spending declined in a variety of categories to start the year, including gasoline stations, home improvement stores and online retailers. Some of the pullback in January could be a natural lull in spending after consumers ramped up purchases and took advantage of holiday discounts late last year. The use of credit cards or buy now pay later programs could have also contributed to slow spending in January as debts are now being repaid.

The Fed will be watching this data closely, as the strength of our economy will impact their monetary policy decisions, and it will be important to see if Retail Sales pick up as we move ahead this year.

Despite some recent high-profile layoff announcements, the number of people filing new unemployment claims declined by 8,000 in the latest week, as there were 212,000 Initial Jobless Claims reported. However, Continuing Claims rose by 30,000, with 1.895 million people still receiving benefits after filing their initial claim. 

What’s the bottom line? While Initial Jobless Claims are still relatively low, the real story is Continuing Claims, which reached their second highest level since November 2021. Continuing Claims have been trending higher since reaching a low of 1.658 million in September, and this suggests it’s becoming harder for people to find a job once they are let go.

The Producer Price Index (PPI), which measures inflation on the wholesale level, rose 0.3% in January, coming in above the expected 0.1% rise. On an annual basis, PPI fell from 1% to 0.9% and while this is a very low number, it was expected to fall to 0.6%. Core PPI, which strips out volatile food and energy prices, was much hotter than expected with a 0.5% rise. The year-over-year reading rose from 1.8% to 2%.

What’s the bottom line? Despite the upside surprise in the data, wholesale inflation is still trending lower. January’s 0.9% year-over-year reading is a sharp drop from 2022’s 11.7% peak.

Remember, the Fed began aggressively hiking the Fed Funds Rate (the overnight borrowing rate for banks) in March 2022 to try to slow the economy and curb runaway inflation. Following eleven hikes in this cycle, the Fed has pressed pause at their last four meetings as signs of cooling inflation grew.

The Fed is expected to begin cutting the Fed Funds Rate later this year, given the progress made to tame inflation. We will have to see if these hotter than expected readings for January ultimately impact the timing of their plans.

Dish up this Cherry Almond Coffee Cake courtesy of Taste of Home, perfect for brunches, afternoon snacks and National Almond Day on February 16.

Preheat oven to 350 degrees Fahrenheit. In a large bowl, mix 2 1/2 cups all-purpose flour and 3/4 cup sugar. Cut in 3/4 cup cubed cold butter until mixture is crumbly. Reserve 1/2 cup of crumb mixture for the topping.

Add 1/2 teaspoon baking powder, 1/2 teaspoon baking soda and 1/4 teaspoon salt to the remaining mixture. Stir in 1 cup sour cream, 1 egg and 1 teaspoon almond extract. Spread batter onto the bottom of a greased 9-inch springform pan.

In a small bowl, beat 8 ounces softened cream cheese and 1/4 cup sugar until smooth. Add 1 egg and beat on low speed until just blended. Pour cream cheese mixture over the batter, then spoon 1 cup cherry preserves on top. Sprinkle with the reserved crumb mixture and 1/2 cup sliced almonds.

Bake until top is golden brown, approximately 50 to 60 minutes. Cool on a wire rack for 15 minutes before serving.

The number of people filing new unemployment claims was lower than expected in the latest week, as Initial Jobless Claims fell by 9,000 to 218,000. Continuing Claims also declined by 23,000, with 1.871 million people still receiving benefits after filing their initial claim.

What’s the bottom line? While Initial Jobless Claims are still relatively low, the four-week average is near the highest level since December. There have also been some high-profile layoff announcements recently, and these numbers could be reflected in future initial unemployment filings. In addition, Continuing Jobless Claims are hovering around the highest levels since 2021, suggesting that people are having a harder time finding new employment once they’re let go.

The National Association of REALTORS® (NAR) recently reported that there were just 1 million homes available for sale at the end of December, which was down 11.5% from November’s 1.13 million available homes. But these numbers don’t tell the whole story! Many homes counted in existing inventory are under contract and not truly available for purchase. In fact, there were only 666,000 “active listings” in January, well below what’s counted in NAR’s reporting and less than half of what we would expect to see in a normal market.

What’s the bottom line? Tight supply is going to remain a reality for some time. Many homeowners with low-rate mortgages are holding on to their property instead of listing it for sale. Plus, demand is only expected to rise, especially if rates move lower this year and more buyers decide to resume their home search. Fannie Mae’s latest Home Purchase Sentiment Index showed that an all-time survey high 36% of respondents said they expect mortgage rates to decline in the next 12 months.

This ongoing disparity between supply and demand is a key reason why home values continue to rise and why now provides great opportunities to take advantage of appreciation gains.

Black Knight released their Home Price Index for November and December, and home values rose 0.1% in each of those months. Prices were also 5.6% higher than in December 2022. CoreLogic also released their latest Home Price Index, which showed that national home values fell 0.1% from November to December. While this monthly figure was slightly different than Black Knight’s, CoreLogic’s 2023 level of appreciation was nearly equivalent, with home values up 5.5% last year.

CoreLogic forecasts that home prices will fall 0.2% in January and rise 2.8% in the year going forward, though it’s worth noting their forecasts tend to be on the conservative side historically. For example, CoreLogic originally forecasted that we would see 3% appreciation in 2023 but we saw 5.5%. Plus going back to 2021, they had forecasted a 6.6% decline in home values, and we saw a nearly 19% gain instead.

What’s the bottom line? The rise in home prices reported by CoreLogic and Black Knight has been echoed by other major indices like Case-Shiller and the Federal Housing Finance Agency, showing that now remains a great opportunity for building wealth through real estate. CoreLogic’s Chief Economist, Dr. Selma Hepp, also noted that “home prices will continue to extend to new highs entering the typically busy spring homebuying season.”

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.2% from October to November after seasonal adjustment. This marked the tenth straight month of gains and a new record high. Home values in November were also 5.1% higher than a year earlier, with S&P DJI’s Head of Commodities, Brian D. Luke, noting that “November’s year-over-year gain saw the largest growth in U.S. home prices in 2023.”

The Federal Housing Finance Agency’s (FHFA) House Price Index also saw home prices rise 0.3% from October to November and 6.6% year-over-year, with their index setting new record highs in home prices every month since February.

Note that FHFA’s report measures home price appreciation on single-family homes with conforming loan amounts, which means it most likely represents lower-priced homes. FHFA also 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? Home prices are on pace to rise between 6-7% in 2023, based on the reported pace of appreciation through November. These indexes show that homeownership continues to provide opportunities for building wealth through real estate.

After a period of aggressive rate hikes that began in March 2022, the Fed once again left their benchmark Federal Funds Rate unchanged at a range of 5.25% to 5.5%. This decision was unanimous and marked the fourth straight meeting where the Fed paused additional hikes.

The Fed Funds Rate is the interest rate for overnight borrowing for banks and it is not the same as mortgage rates. The Fed’s eleven hikes between March 2022 and July 2023 were made to slow the economy and curb the runaway inflation seen over the last few years.

What’s the bottom line? The Fed said they believe they have reached their peak Fed Funds Rate for this cycle. However, members don’t expect to begin cutting rates until they have “gained greater confidence that inflation is moving sustainably toward 2 percent.” Note that the Fed’s favored measure, Core Personal Consumption Expenditures, declined to 2.9% annually as of the latest report for December.

During his press conference, Fed Chair Jerome Powell acknowledged that inflation data has been favorable over the last six months. However, he does not think the Fed will be ready to start cutting rates at their next meeting on March 20, explaining that members want to see “more good data.”

These crowd-pleasing Baked Chicken Wings from Allrecipes are easy to make and perfect for game day or any favorite celebration!

Preheat oven to 375 degrees Fahrenheit. In a large resealable bag, combine 3 tablespoons olive oil, 3 cloves pressed garlic, 2 teaspoons chili powder, 1 teaspoon garlic powder, and salt and pepper to taste.

Add 10 to 12 chicken wings to the bag, reseal and shake to coat. Arrange chicken wings in a single layer on a baking sheet. Cook until wings are crisp, about 30 to 45 minutes.

Enjoy wings with classics like Ranch dressing, carrots and celery sticks!

The latest weekly Initial Jobless Claims reached their highest level since November, as 224,000 people filed for unemployment benefits for the first time. Continuing Claims also surged higher, up 70,000 with 1.898 million people still receiving benefits after filing their initial claim.

What’s the bottom line? Both Initial and Continuing Jobless Claims have risen over the last two weeks to nearly three-month highs. Plus, the latest Job Cuts report from Challenger, Gray & Christmas showed that announced layoffs in January surged from December, and this could be reflected in future Unemployment Claim filings.

The latest Job Openings and Labor Turnover Survey (JOLTS) showed that job openings were stronger than expected in December, rising from 8.925 million in November to 9.026 million. The hiring rate rose from 3.5% to 3.6% while the quit rate remained at 2.2%, suggesting there’s a lack of employers trying to entice workers with other offers.

What’s the bottom line? While the Fed watches this report to monitor slack in the labor market, there are flaws in the data. The increase in working from home means job listings are being posted in multiple states more frequently. As a result, they’re being overcounted in the JOLTS total so the report may be weaker than the headlines suggest, especially given the number of high-profile companies that have announced layoffs recently.

ADP’s Employment Report showed that private payrolls began 2024 slower than expected, as employers added just 107,000 new jobs in January. Most of the growth came in service-providing industries (+77K), with goods-producers adding the rest.

Annual pay for job stayers increased by 5.2% while job changers saw an average increase of 7.2%, though these figures have cooled considerably from recent highs. In addition, the difference between pay growth for job stayers versus job changers has also shrunk substantially, indicating there’s less incentive for switching jobs.

What’s the bottom line? Nela Richardson, chief economist for ADP, said, “Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay.” She also noted that “wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the U.S. and globally.”

The Bureau of Labor Statistics (BLS) reported that there were 353,000 jobs created in January, which was nearly double expectations. Revisions to November and December also added 126,000 jobs in those months combined. The unemployment rate held steady at 3.7%.

What’s the bottom line? While the headline job growth figure for January appears strong on the surface, future revisions lower are a very real possibility. January is always a heavily adjusted month, as new benchmarks, seasonal adjustments and population controls play a big role in calculating the data.

In addition, there are two reports within the Jobs Report and there is a fundamental difference between them. The Business Survey is where the headline job number comes from, and it’s based predominately on modeling and estimations.

The Household Survey, where the Unemployment Rate comes from, is considered more real-time because it’s derived by calling households to see if they are employed.

This survey has its own job creation component and it told a completely different story, showing 31,000 job losses.

Average weekly hours worked also declined to the lowest level since 2010 excluding the pandemic. This is important because one of the ways businesses cut costs is to cut the number of hours worked. On average the entire labor force is working 30 minutes fewer per week, which equates to 2.4 million job losses on its own.

The first reading of fourth quarter 2023 Gross Domestic Product (GDP) showed that the U.S. economy grew by 3.3%. While this is a decline from 4.9% in the third quarter, it was much stronger than estimates and due in large part to easing inflation and a strong pace of consumer spending.

What’s the bottom line? While this data is subject to revision when the second and final readings are released on February 28 and March 28, respectively, the stronger than expected first reading is promising given that GDP functions as a scorecard for the country’s economic health.

In addition, GDP for all of 2023 grew at a 2.5% annualized pace, higher than the 1.9% growth seen in 2022 and well above forecasts at the start of last year that had called for little to no growth.