The S&P 500 snapped its four-week losing streak, posting a 0.51% gain from the previous Friday.
The yield on the 10-year note ended March 21, 2025 at 4.25%. Meanwhile, the 2-year note ended at 3.94% and the 30-year note ended at 4.59%.
In February, home values rose for the 23rd consecutive month, reaching a new all-time high, according to the Zillow Home Value Index. However, after adjusting for inflation, real home values declined for the 10th straight month, hitting their lowest level since May 2021.
When we think of the U.S. government's finances, we often focus on the massive debt. But what about the assets? What does Uncle Sam actually own, and which asset is the largest?
Existing home sales rebounded in February with their largest monthly increase in a year. According to the National Association of Realtors (NAR), existing home sales rose 4.2% from January, reaching a seasonally adjusted annual rate of 4.26 million units in February.
The latest Philadelphia Fed manufacturing index showed continued expansion though activity declined. In March, the index fell to 12.5 from 18.1 in February, the second consecutive monthly drop. The latest reading was higher than the forecast of 8.8.
In the week ending March 15th, initial jobless claims were at a seasonally adjusted level of 223,000. This represents an increase of 2,000 from the previous week's figure. The latest reading was lower than the 224,000 forecast.
The Federal Reserve concluded its second meeting of the year by keeping the federal funds rate (FFR) at 4.25-4.50%, as expected.
Bitcoin's closing price hovered around $83,000 this week. BTC is down ~12% year to date and ~22% below its record high.
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.
Gas prices were down for a fourth straight week, hitting their lowest level in two months. As of March 17th, the price of regular and premium gas were down 1 and 2 cents from the previous week, respectively. The WTIC end-of-day spot price for crude oil closed at $67.373, up 2.0% from last week.
FINRA has released new data for margin debt, now available through February. The latest debt level is at $918.144 billion, just below its record high from January. Margin debt was down 2.0% month-over-month (MoM) and up 23.6% year-over-year (YoY). However, after adjusting for inflation, the debt level was down 2.5% MoM and up 20.2% YoY.
Industrial production jumped 0.75% in February to a new record high, surpassing the expected 0.2% increase. Compared to one year ago, industrial production is up 1.4%.
In the latest report by the Census Bureau, building permits fell for a third straight month to a seasonally adjusted annual rate of 1.456 million in February. This marks a 1.2% decrease from January and a 6.9% decline compared to one year ago.
In the latest report by the Census Bureau, housing starts jumped to a seasonally adjusted annual rate of 1.501 million in February. This marks an 11.2% increase from January but a 2.9% decline compared to one year ago.
Five of the nine indexes on our world watch list have posted gains through March 17, 2025. Hong Kong's Hang Seng is in the top spot with a year to date gain of 23.05%. Germany's DAXK is in second with a year to date gain of 15.29% while France's CAC 40 is in third with a year to date gain of 9.20%.
Nominal retail sales in February were up 0.20% month-over-month (MoM) and 3.11% year-over-year (YoY). However, after adjusting for inflation, real retail sales were down 0.02% MoM and up 0.38% YoY.
Builder confidence fell for a second straight month as economic uncertainty, tariff threats, and elevated construction costs continue to weigh on sentiment. The National Association of Home Builders (NAHB) Housing Market Index (HMI) dropped to 39 this month, down 3 points from February and the lowest level since August. The latest reading was below the 42 forecast.
Manufacturing activity dropped significantly in New York State, according to the Empire State Manufacturing March survey. The diffusion index for General Business Conditions fell 25.7 points to -20.0, the lowest level since January 2024. The latest reading was worse than the forecast of -1.9.
The weekly leading economic index (WLEI) is a composite for the U.S economy that draws from over 20 time-series and groups them into the following six broad categories which are then used to construct an equally weighted average. As of March 7th, the index was at 14.416, down 3.785 from the previous week, with 5 of the 6 components in expansion territory.
The Census Bureau's Advance Retail Sales Report for February showed a moderate rebound last month, with headline sales rising 0.2%. Meanwhile, January's figure was revised downward to a 1.2% loss. The latest data came in weaker than the anticipated 0.6% growth in consumer spending.
The Michigan Consumer Sentiment Index declined further this month, indicating growing pessimism among consumers. In March, the index plummeted to 57.9, the lowest level since November 2022. This represents a 10.5% (6.8 points) drop from the previous month, falling short of the anticipated 63.1.
As of Q4 2024, the latest Fed balance sheet indicates that household net worth has risen 186% since reaching its 2009 low. However, when adjusted for inflation, household net worth has actually increased by only 93% since the 2009 trough.
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
Today, one in three of the 65-69 cohort, one in five of the 70-74 cohort, and nearly one in ten of the 75+ cohort are in the labor force.
The labor force participation rate (LFPR) is a simple computation: You take the civilian labor force (people aged 16 and over employed or seeking employment) and divide it by the civilian non-institutional population (those 16 and over not in the military and or committed to an institution). As of February, the labor force participation rate is at 62.4%, down from 62.6% the previous month and the lowest level since January 2023.
Our monthly workforce recovery analysis has been updated to include the latest employment report for February. The unemployment rate inched up to 4.1%. Additionally, the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 151,000.
Wholesale inflation eased significantly in February, slowing more than expected. The producer price index for final demand was flat month-over-month, down from 0.6% in January and lower than the 0.3% forecast. On an annual basis, headline PPI increased 3.2%, down from 3.7% in January and below the 3.3% forecast.
The Consumer Price Index for Urban Consumers (CPI-U) release for February puts the year-over-year inflation rate at 2.82%. The latest reading keeps inflation below the 3.73% average since the end of the Second World War. Additionally, inflation now sits below the 10-year moving average which is now at 2.93%.
Inflation affects everything from grocery bills to rent, making the Consumer Price Index (CPI) one of the most closely watched economic indicators. The Bureau of Labor Statistics (BLS) tracks this by categorizing spending into eight categories, each weighted by its relative importance.
Inflation cooled for the first time in five months in February. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index was at 2.8% year-over-year, lower than the expected 2.9% growth. Core CPI also came in lower than expected, cooling to 3.1% year-over-year.
Six of the nine indexes on our emerging markets watch list have posted gains through March 10, 2025. Russia's MOEX is in the top spot with a year to date gain of 11.1%. Chile's IPSA is in second with a year to date gain of 10.1% while South Korea's KOSPI is in third with a year to date gain of 8.84%.
The latest Job Openings and Labor Turnover Survey (JOLTS) report showed that job openings rose more than expected in January, while hiring and quits also edged higher. Vacancies increased to 7.740 million, up from December's downwardly revised 7.508 million. The January figure came in above the expected 7.650 million.
The NFIB Small Business Optimism Index dropped for a second straight month, falling to 100.7 in February. While optimism among small business owners moderated last month, uncertainty spiked to its second highest reading of all time.
Multiple jobholders account for 5.5% of civilian employment, the highest level since 2009. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
Let's take a close look at February's employment report numbers on Full and Part-Time Employment. The latest data shows that 82.5% of total employed workers are full-time (35+ hours) and 17.5% of total employed workers are part-time (<35 hours).
What does the ratio of unemployment claims to the civilian labor force tell us about where we are in the business cycle and recession risk?
There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of these indicators: nonfarm employment. In February, total nonfarm payrolls increased by 151,000, while the unemployment rate inched up to 4.1%.
Travel on all roads and streets increased in December. The 12-month moving average was up 0.13% month-over-month and was up 0.99% year-over-year. However, if we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.07% MoM and up 0.38% YoY.
The moving average for vehicle sales per capita series peaked in August 1978. Fast forward more than 45 years, it is now down 37.2% from that peak.
The latest employment report showed that 151,000 jobs were added in February, falling short of the expected 159,000. Meanwhile, the unemployment rate unexpectedly inched up to 4.1%.
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $16,440 for an annualized real return of 9.98%.
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. This analysis focuses on the P/E10 ratio, key indicator of market valuation, and its correlation with inflation and the 10-year Treasury yield.
The U.S. trade deficit widened more than expected, as a surge in imports exceeded a smaller increase in exports. In January, the trade deficit expanded 34.0% to -$131.4B, the largest one month jump since 2015 and the largest deficit on record.
In the week ending March 1st, initial jobless claims were at a seasonally adjusted level of 221,000. This represents a decrease of 21,000 from the previous week's figure. The latest reading was lower than the 234,000 forecast.
The S&P 500 real monthly averages of daily closes reached a new all-time high in December 2024 but has retreated from it the past few months. Let's examine the past to broaden our understanding of the range of historical bull and bear market trends in market performance.
Here is a summary of the four market valuation indicators we update on a monthly basis.
Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 27.9 and the latest P/E10 ratio is 37.1.
With the Q4 GDP second estimate and the February close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 205.0%, down slightly from the previous quarter.
