Advisors on This Week’s Show

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Jan. 27-31)

Significant Economic Indicators & Reports

Monday

The Commerce Department reported a 4% gain in the annual rate of new home sales in December. Sales were up almost 7% from the year before and just below where they were heading into the COVID-19 pandemic. For perspective, the pace of sales – 698,000 a year – was half the peak rate in mid-2005 and represented about one-seventh of all home sales. The median sales price rose 2% from the year before to $427,000.

Tuesday

The Commerce Department said durable goods orders declined again in December, the fourth setback in five months, led by commercial aircraft. Compared to the year before, long-lasting factory orders were down 1.5% after shrinking 2.2% for the month. Excluding transportation equipment, orders rose 0.3% and were up 1.4% from the end of 2023. A proxy for business investment gained 0.5% from November and was up 0.6% from December 2023.

Housing prices increased again in November, rising 3.8% from the year before, according to the S&P CoreLogic Case-Shiller national index. The gain compared to a 3.6% year-to-year advance in October, marking the first acceleration in nine months. Since 1988, the average 12-month increase had been 2.7%, although it averaged 5.2% since 2000. Housing costs continued to outpace overall inflation, which reached 2.9% in December, based on the Consumer Price Index.

The Conference Board said its consumer confidence index declined in December for the second month in a row, keeping toward the lower end of a sideways range that began in 2022. The business research group said its gauge sank broadly from November, led by a drop in attitudes toward labor conditions. Consumer responses avoided a measure historically tied to impending recession. Economists follow consumer confidence because consumer spending drives 70% of U.S. economic activity.

Wednesday

No major releases

Thursday

The U.S. economy grew at an annual pace of 2.3% in the fourth quarter, down from 3.1% in the previous three months. The Bureau of Economic Analysis said the deceleration in gross domestic product was led largely by a drop in business investments. Consumer spending rose at a 4.2% annual rate, the fastest since the first quarter of 2023. Government spending and a decrease in imports also boosted fourth-quarter growth. Also slowing: Inventories, federal spending and residential spending. Compared to the fourth quarter of 2023 and adjusting for inflation, GDP rose 2.5% in 2024, down from 3.8% the year before.

The four-week moving average for initial unemployment claims fell for the fourth time in five weeks. The average was 41% below the all-time average dating back to 1967. The Labor Department said 2.2 million Americans claimed jobless benefits in the latest week, down more than 1% from the week before but 9% higher than the same time in 2023.

An early indicator of home sales declined in December after four months of gains. The National Association of Realtors’ index of pending home sales dropped 5.5% from November and was down 5% from December 2023. The trade group said more home buyers are using cash, partly offsetting the deterrent of relatively high mortgage rates. At 74.2, the index of pending sales was more than 25% below what the association considers normal sales volume at the current population level.

Friday

The Bureau of Economic Analysis said consumer spending jumped 0.7% in December, the most since March and outpacing a 0.4% increase in personal income. Consumer spending is the driving force in gross domestic product, so the gain was another sign of economic resilience. The personal consumption expenditures index, which the Federal Reserve Board follows for inflation, rose 2.6% from December 2023, accelerating for the third month in a row. The inflation rate remained above the Fed’s 2% long-term target but was below a four-decade high exceeding 7% in June 2022.

Kyle Tetting, Dave Sandstrom and Tom Pappenfus make sense of market volatility and other developments affecting investors.

Market Closings for the Week

Nasdaq – 19627, down 327 points or 1.6%
Standard & Poor’s 500 – 6041, down 61 points or 1.0%
Dow Jones Industrial – 44544, up 120 points or 0.3%
10-year U.S. Treasury Note – 4.57%, down 0.06 point

Money Talk Podcast, Friday Jan. 31, 2025