Weekly Review for Week Ending 5/31/24
This past week brought several notable developments in the housing market and broader economy. The weaker than expected Pending Home Sales Index in April was initially only mildly interesting. However, when considered alongside rising inventories, it starts to paint a more predictive picture. Simply put, more homes are being listed for sale, but they aren't selling as quickly as expected. This could mean that prices will begin to moderate. While this moderation is bad for sellers, it's good for buyers, and it puts downward pressure on home prices, which could significantly contribute to easing inflation.
The second release of Q1 2024 GDP revealed weaker consumer demand than initially estimated. Although a weaker GDP is not ideal for the economy, the unexpected softness in inflation is promising for the Fed, helping officials gain more confidence in the disinflationary trajectory.
The PCE price index, a key inflation measure tracked by the U.S. central bank for its 2% target, increased by 0.3% in April, matching the gain from March. These figures aligned with economists' expectations. We've been moving sideways with inflation for the last couple months, but it seems like things will begin to cool off, which would be very welcome news.
The stock market wrapped up May with strong performance. The S&P 500 climbed nearly 5% (FactSet), rebounding from an April decline and marking its sixth positive month out of the past seven. The NASDAQ led with a gain of almost 7%, while the Dow added more than 2%, despite a late-month decline that pulled it down from its first-ever 40,000-point closing level reached on May 17.
Looking Ahead
In the upcoming week, a major focus will be the monthly labor market report due out on Friday. This report will indicate whether the recent trend of moderating job growth extended into May. In April, the economy added 175,000 jobs, down from 315,000 in March. The unemployment rate rose slightly to 3.9%, and wage growth slowed. Investors and policymakers alike will be watching these figures closely to gauge the health of the labor market and its implications for economic growth and inflation.
As always, if you have any concerns or questions, feel free to reach out to me by phone or email. I'm here to help you navigate these economic developments.
Have a good week,
Jeremy Raffer, MBA
Director & Wealth Manager
Author “Financial Planning for Widows”
m. 201-747-2705
e. jeremy.raffer@stewardpartners.com
Steward Partners
115 W. Century Rd, Suite 145
Paramus, NJ 07652
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