For the week ending February 28, 2025

Please see the summary of last week's economic indicator outcomes below (grouped by indicator type):

inflation & Consumer Spending

Inflation remained stable, but consumer spending showed signs of slowing. While price pressures held steady, Americans tightened their wallets after strong spending in the previous month.

• Core PCE Price Index (YoY) (Jan): 2.6% (unchanged from expectations, down from 2.9% prior)

• Core PCE Price Index (MoM) (Jan): 0.3% (in line with forecasts, slightly up from 0.2% prior)

• PCE Price Index (YoY) (Jan): 2.5% (in line with expectations, slightly lower than 2.6% prior)

• PCE Price Index (MoM) (Jan): 0.3% (steady with prior and expected levels)

• Personal Spending (MoM) (Jan): -0.2% (below expectations of 0.2%, reversing from 0.8% prior)

Economic Growth & Business Activity

Growth cooled down in the fourth quarter, as GDP met expectations but slowed from its previous pace. Business activity showed some bright spots, with manufacturing in Chicago improving, but economic projections for early 2025 turned negative.

• GDP (QoQ) (Q4): 2.3% (meets expectations but down from 3.1% prior)

• GDP Price Index (QoQ) (Q4): 2.4% (higher than 2.2% expected and 1.9% prior)

• Chicago PMI (Feb): 45.5 (above 40.5 expected, showing improvement from 39.5 prior)

• Atlanta Fed GDPNow (Q1): -1.5% (sharp drop from 2.3% prior)

Housing Market

The housing market struggled, with home sales falling sharply and pending transactions declining further. Rising borrowing costs and affordability concerns continued to weigh on buyers.

• New Home Sales (Jan): 657K (lower than 679K expected, down from 734K prior)

• New Home Sales (MoM) (Jan): -10.5% (a sharp drop from 8.1% prior)

• Pending Home Sales (MoM) (Jan): -4.6% (worse than expected -0.9%, further decline from -4.1% prior)

• Building Permits (Jan): 1.473M (slightly below expectations of 1.483M, down from 1.482M prior)

Labor Market

The job market showed early signs of strain, with an increase in jobless claims. While still stable, the rise in layoffs could indicate a cooling labor market in the months ahead.

• Initial Jobless Claims: 242K (higher than 222K expected and 220K prior)

• Continuing Jobless Claims: 1,862K (slightly below 1,870K expected, near 1,867K prior)

Manufacturing & Trade

Factory orders bounced back after a weak December, but trade deficits widened significantly. Businesses are adjusting to shifting demand, while global trade imbalances persist.

• Durable Goods Orders (MoM) (Jan): 3.1% (stronger than 2.0% expected, reversing from -1.8% prior)

• Core Durable Goods Orders (MoM) (Jan): 0.0% (weaker than 0.2% expected, down from 0.1% prior)

• Retail Inventories Ex Auto (Jan): 0.4% (up from -0.1% prior)

• Goods Trade Balance (Jan): -$153.26B (wider deficit than expected -$116.90B and -$122.01B prior)

Energy Markets

Oil markets saw unexpected inventory declines, despite expectations for builds. Rig counts remained stable, but investors kept an eye on shifting supply trends.

• API Weekly Crude Oil Stock: -0.640M (compared to 2.300M expected, down from 3.339M prior)

• Crude Oil Inventories: -2.332M (contrasting with 2.500M expected, down from 4.633M prior)

• Cushing Crude Oil Inventories: 1.282M (down from 1.472M prior)

Treasury Auctions & Federal Reserve

Treasury yields dipped across auctions, reflecting investor demand for safer assets. The Federal Reserve continued to monitor economic conditions, with several officials delivering speeches throughout the week.

• 2-Year Note Auction: 4.169% (down from 4.211% prior)

• 5-Year Note Auction: 4.123% (lower than 4.330% prior)

• 7-Year Note Auction: 4.194% (down from 4.457% prior)

• Fed's Balance Sheet: $6,766B (slightly down from $6,782B prior)

Market Sentiment

Consumer confidence dipped noticeably, suggesting that people are growing wary about the economy. Meanwhile, speculative bets in commodities and equities reflected mixed investor sentiment.

• CB Consumer Confidence (Feb): 98.3 (weaker than 102.7 expected and 105.3 prior)

• CFTC Speculative Net Positions:

  • Crude Oil: 171.2K (down from 197.6K prior)

  • Gold: 261.6K (lower than 268.7K prior)

  • Nasdaq 100: 25.8K (up from 9.8K prior)

  • S&P 500: -32.8K (slightly improved from -40.0K prior)

IN A NUTSHELL…

Inflation held steady, but consumer spending cooled off. The housing market struggled, with home sales and pending transactions falling sharply. Jobless claims ticked up, hinting at some softness in the labor market.

On the business side, durable goods orders rebounded, but trade deficits widened more than expected. Oil inventories unexpectedly shrank, and Treasury yields dipped across multiple auctions. Consumer confidence took a hit, showing people are growing more cautious about the economy.

Overall, growth is slowing, and some warning signs are emerging, but certain areas—like manufacturing—are still holding up.