Overview: There were no major surprises in the economic data released over the past week. The most significant report revealed that consumer spending was very close to the expected levels. As a result, mortgage rates ended the week nearly unchanged.
Consumer spending remained strong at the end of the year, capping another solid holiday shopping season. In December, retail sales rose 0.4% from November, close to the consensus forecast, and were 3.8% higher than a year ago. Strength was seen in furniture, autos, apparel, and sporting goods/hobbies. Sales in many categories may have benefited from purchases by consumers worried that potential new tariffs may cause prices to rise. In addition, auto sales likely were boosted by added demand from people replacing vehicles damaged by recent hurricanes.
The latest report on housing starts was encouraging, although the bulk of the strength came from the multi-family segment. In December, overall housing starts jumped 16% from November, well above the consensus forecast and the highest level since February 2024. Starts for volatile multi-family units shot up 59%, while single-family starts rose a modest 3%. Similarly, single-family building permits, a leading indicator of future construction, increased just 2% from November. In addition, a separate survey of home builder sentiment on housing market conditions from the National Association of Home Builders (NAHB) was in line with expectations.
The Department of Labor releases the total number of new claims for unemployment insurance each week, and recent reports suggest that the labor market remains healthy. The latest reading was 217,000, close to the consensus forecast. This was far below the inflated figures seen during the early months of the pandemic, and in line with the levels that were typical during 2019. Weekly jobless claims are important because they are one of the timeliest indicators of labor market trends.
Retail Sales (% change)
Week Ahead
Jan. 24
Existing-Home Sales
Jan. 27
New-Home Sales
Jan. 28
Durable Goods report
Consumer Confidence Index
Jan. 29
Federal Reserve meeting (no rate change expected)
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