10 Things You Need to Know: February 19, 2025
Key data releases this week include: NAHB Housing Market Index (Tue), housing starts (Wed), FOMC meeting minutes (Wed), leading economic indicators (Thu), consumer sentiment (Fri), and existing homes sales (Fri).
Haver
February 11, 2025
The NFIB Small Business Optimism Index declined 2.2% to 102.8 during January after rising 3.3% to 105.1 in December, according to the National Federation of Independent Business. The index rose 14.3% y/y, but seven of the 10 index components fell last month.
Haver
February 12, 2025
The Consumer Price Index increased 0.5% in January after rising 0.4% (3.0% y/y) in December. A 0.3% January rise had been expected in the Action Economics Forecast Survey. The CPI excluding food and energy rose 0.4% (3.3% y/y) following increases of 0.2% in December. A 0.3% rise was expected in the Action Economics Survey.
Haver
February 13, 2025
The Producer Price Index for final demand increased 0.4% (3.5% y/y) last month after increasing 0.5% in December. A 0.3% rise expected in the Action Economics Forecast Survey. The PPI excluding food & energy rose an expected 0.3% (3.6% y/y) after increasing 0.4% in December.
Haver
February 14, 2025
Total retail sales weakened 0.9% (+4.2% y/y) during January after rising 0.7% in December, according to the U.S Census Bureau. Expectations were for a 0.1% easing in the Action Economics Forecast Survey. Sales in the retail control group, which excludes autos, building materials, gasoline stations, and food services, fell 0.8% (+3.7% y/y) after rising 0.8% in December.
Bloomberg
February 12, 2025
China’s property crisis is worsening, with a record $160 billion pile of distressed debt and a brief revival in home sales fizzling out despite government stimulus. The Chinese government’s rescue efforts are seen as cautious and insufficient, with more forceful action needed to revive homebuyer confidence and stabilize the $15 trillion property sector to prevent further economic risks.
Barron’s
February 17, 2025
To realize $1 trillion in government savings would require a 30% reduction in non-defense spending (excluding entitlements such as Social Security, Medicare, and Medicaid); a 15% cut in defense outlays; and a 15% cut in social spending such as entitlements. The GAO estimates that between $233 billion and $421 billion annually was lost to fraud between 2018 and 2022.
Barron’s
February 17, 2025
Central banks have been buying gold as they look for ways to diversify out of the dollar after the U.S. and its allies froze Russia’s central bank assets following the invasion of Ukraine. The PBOC has been a big buyer of the precious metal, as have Turkey, Russia, and Poland. China has even allowed its insurance companies to allocate more of their investments to gold. Investors, too, have been putting more money into gold with demand increasing 25% in 2024.
Financial Times
February 12, 2025
Richard Clarida, former vice chair of the Federal Reserve, says markets might underestimate how much inflation will fall this year. Clarida notes that while inflation remains above the Federal Reserve’s 2% target, it could move toward the target more quickly than expected because of limited pass-through of tariffs and growth headwinds from policy uncertainty.
Oxford Economics
February 13, 2025
The latest jobless claims data are consistent with a labor market characterized by low layoffs and a subdued pace of hiring. Despite the low hiring rate, the Fed thinks the labor market is healthy enough to withstand a slower pace of rate cuts as inflation remains sticky. We now think the Fed will keep rates on hold for most of 2025 and look for only one rate cut this year.