Key Economic FindingsWe received a wealth of data last week, and the readings helped deepen our understanding of the economy. The reports showed some mixed results, but much of the information continues to indicate that the economy is on solid ground.
- Housing starts jumped 9.7%, beating expectations and reaching the 2nd-fastest rate since the recession. Even with mortgage rates increasing and tax reform affecting some buyers’ mortgage interest deductions, the data shows positive news for future homebuilding as well.
- Consumer price index increased 0.5%, rising 2.1% in the past year. This reading indicates that prices are continuing to rise faster than the Federal Reserve’s target rate.
- Retail sales fell, dropping 0.3% in part due to slow motor vehicle sales. In addition, negative updates to December’s readings could affect 4th-quarter Gross Domestic Product results.
- Consumer sentiment beat expectations, coming in at 99.9 – its 2nd-highest reading in 14 years. The movement came as tax-cut optimism outweighed stock-market concerns.
The TakeawayMany reports show that the economy is strong, so watching for inflation will remain important as the markets keep moving. The combination of growing inflation and a strong labor market means the Fed is still likely to hike rates 3 times this year, with a 4th increase very possible. Looking ahead, volatility may continue, so keep this on your radar. Investors caught between conflicting concerns about missing the bull market and losing money may contribute to ongoing uncertainty. Remember, stock fluctuations are normal. We are here to help you understand what’s happening in the markets and how to position yourself for the financial life you desire.
ECONOMIC CALENDARMonday: U.S. Markets Closed for Presidents’ Day Wednesday: Existing Home Sales Thursday: Jobless Claims
Quote Of The Week
“Know what you own, and know why you own it.” – Peter Lynch