Wall Street enjoyed one of its best weeks in quite some time as stocks moved higher by the close of trading last Friday. The major stock benchmark indexes posted solid weekly gains on the heels of easing U.S.-China trade tensions. The 90-day tariff truce helped drive the S&P 500 back into positive territory for the year. Most of the market sectors experienced growth, except for health care. Consumer discretionary and information technology led the advance. Weaker-than-expected economic reports chilled traders’ enthusiasm, despite the favorable tariff news. Crude oil prices moved higher for the second consecutive week. While easing global tensions helped stocks, gold prices slipped lower. After reaching a three-month high last Thursday, yields on 10-year bonds dipped by the end of the week.
Last Week’s Economic News
- Consumer prices rose in April, following a slight decline in March. Over the past 12 months, the Consumer Price Index (CPI) increased 2.3%.
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Core CPI (excluding food and energy) rose 2.8% year-over-year and 0.2% for the month. Energy prices increased, while food prices declined a bit.
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Producer prices decreased in April—the largest monthly decline since December 2009.
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Prices for goods were flat, while core producer prices (excluding food, energy, and trade services) slipped. Over the last 12 months, overall producer prices and core producer prices advanced.
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Retail and food services sales edged up in April.
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Retail trade sales fell from March but increased 4.7% from April 2024.
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Motor vehicle and parts dealers saw a year-over-year gain, while food service and drinking place sales also rose.
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Industrial production was flat in April.
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Manufacturing output declined and mining fell, while utilities rose.
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Total industrial production was up over the past 12 months.
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Import prices increased in April, driven by an increase in nonfuel imports.
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Export prices also rose slightly and were up 2.0% compared to April 2024.
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The federal government reported a $258 billion surplus in April, supported by $537 billion in income tax receipts.
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The fiscal year 2025 deficit stands at $1.049 trillion.
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Residential building permits declined in April and were 3.2% lower than a year earlier.
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The national average retail price for regular gasoline was $3.120 per gallon on May 12, down $0.488 below last year’s level.
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For the week ended May 10, there were 229,000 new unemployment claims, unchanged from the prior week.
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The insured unemployment rate remained at 1.2%.
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Eye on the Week Ahead
The housing sector is front and center this week. The latest data on sales of new and existing homes is available for April. Sales of existing homes fell in March, while sales of new single-family homes rose. Higher mortgage lending rates have kept some potential homebuyers away over the past several months.
Have a nice week!
Sincerely,
Robert G. Carpenter