The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
U.S. industrial production rose 0.7% in September, topping forecasts and marking the strongest monthly gain in five months. But the headline was driven largely by utilities, while manufacturing rose just 0.3% and auto output fell, pointing to a firmer but uneven factory recovery.
Mortgage borrowing costs remain stubbornly elevated as the 30-year fixed rate stays at 7.40%, its highest level in nearly three years. A small dip in the 15-year rate offers little relief, while higher rates continue to weigh on affordability, demand, and the broader housing market.
U.S. retail sales rose more than expected in September, but much of the gain came from higher gasoline prices rather than stronger underlying demand. The report points to a resilient consumer, while also reinforcing the case for the Federal Reserve to stay cautious on rate cuts.
U.S. jobless claims held under the key 200,000 mark, signaling that layoffs remain historically low even as the labor market loses momentum. Continuing claims eased and the four-week average stayed near recent lows, reinforcing a stable but cooling jobs backdrop that gives the Federal Reserve little urgency to cut rates.
U.S. producer prices surged in September, with headline PPI posting its biggest monthly gain since March 2022 and core measures also running hot. The broad inflation rebound strengthens the case for a cautious Federal Reserve and reduces the odds of near-term rate cuts.
U.S. consumers are still spending, but the mix is getting tougher. Retail sales remained resilient even as CPI reaccelerated, sentiment weakened, credit growth slowed and mortgage rates climbed, reinforcing the view that households are under growing pressure and keeping the Fed on alert.
The MBA 30-year mortgage rate climbed to 7.50%, its highest reading since late 2023, deepening affordability pressures across the US housing market. Applications fell, refinancing stayed weak, and rising inventory is giving buyers more leverage even as borrowing costs remain restrictive.
The latest Beige Book paints a mixed picture: manufacturing is holding up, but consumer spending is soft, hiring is subdued and price pressures remain sticky. With inflation still firm and growth only modest, markets are leaning toward a Fed hold at the next meeting.
September’s CPI report showed inflation reaccelerating, with headline prices up 0.6% and core inflation also running hotter than expected. Gasoline led the surge, Treasury yields jumped, and growth stocks sold off as traders boosted odds of another Fed rate hike.
The NFIB Small Business Optimism Index eased in September as owners grew more cautious about expansion. Uncertainty jumped to 90, labor shortages stayed the top problem, and inflation concerns climbed, signaling a fragile but still intact small-business economy.
U.S. existing-home sales edged higher in September and beat forecasts, helped by rising inventory. But mortgage rates near 7.4% and a record September median price of $417,500 kept affordability under pressure, suggesting the housing market is stabilizing rather than breaking into a true recovery.
US markets face a pivotal stretch as retail sales and producer prices test consumer strength and inflation pressure. With jobless claims still low, manufacturing surveys in expansion, and Fed speakers on deck, investors will watch for clues on whether policy stays restrictive or shifts toward caution.
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