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Last week’s economic calendar was highlighted by new housing data and purchasing managers’ reports. The National Association of Realtors’ Pending Home Sales Index (PHS) improved for the second straight month, increasing 8.1% between December and January and reflecting better affordability from falling mortgage rates during that period.1 The CoreLogic S&P Case-Shiller Index posted a 5.8% year-over-year increase in December, down from a 7.6% gain in November, marking the eighth straight month of decelerating annual home price gains.2 Meanwhile, the Institute for Supply Management manufacturing Purchasing Managers’ Index (PMI) and services PMI data continued to diverge, reflecting a continued rotation of spending away from goods and toward services.
This Wednesday, the Federal Reserve (Fed) will release the Beige Book, which will report on the economic conditions across the 12 Fed Districts from early January through late February. On Thursday, the Labor Department will report the number of worker filings for unemployment benefits during the week ending March 4th. The median forecast for initial claims is 193,000, up 3,000 from the week ending February 25th. Finally, on Friday, the Labor Department reports on the state of the U.S. labor market in February, including the level of payrolls and the unemployment rate. The median forecast is employers adding approximately 225,000 jobs and a 3.4% unemployment rate in February.3
Much of this week’s focus will be on two testimonies by Fed Chair Jerome Powell. First, Powell will give the semiannual monetary policy testimony to the Senate Banking Committee on Tuesday. He will then testify before the House Financial Services Committee on Wednesday.4 It’s expected that he will stress that the Federal Open Market Committee (FOMC) remains committed to hiking interest rates until inflation moves back to the Fed’s 2% target – and is willing to adjust policy as they see core inflation slow.
Sources:
1Source: National Association of Realtors- Pending Home Sales Snapshot; as of 3/6/23
2Source: S&P Dow Jones Indices- S&P Corelogic Case-Shiller Index Decline Continued in December; 2/28/23
3Source: MarketWatch- U.S. Economic Calendar; as of 3/6/23
4Source: MarketWatch- U.S. Economic Calendar; as of 3/6/23
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