It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
Consumer Debt Surges On Student Loans
In February, U.S. consumer credit rose by $16.49 billion to $3.13 trillion. This came below economists’ estimates of a $14.09 billion increase. Meanwhile, January consumer credit was revised up to show a $13.8 billion gain, up from $13.7 billion. Breaking it down, revolving credit plunged $2.42 billion—this is second month in row that credit card debt has fallen. Meanwhile, non-revolving credit surged $18.91 billion, the largest jump in a year. It’s clear that student loan market is boosting consumer borrowing in the U.S. I expect that credit card debt will also increase over the next few months as the spring thaw heats up consumer spending.
Wholesalers Restock Their Sales
In February, U.S. wholesalers increased their stockpiles by 0.5%. Sales rose 0.7%, representing a rebound from the 1.8% drop in January. At the current sales pace, wholesalers have enough stock to last 1.19 months. Meanwhile, wholesale inventories for January were revised to reflect a 0.8% gain, up from a 0.6% increase previously. The rebound in sales is a good sign because it gives wholesalers incentives to continue restocking their sales. While analysts don’t expect inventories to drastically boost first-quarter growth, this bodes well for the second quarter and beyond.
Jobless Claims Plunge to Seven-Year Low
Last week, jobless claims plunged by 26,000 to a 300,000 annual rate. This was a stronger turnout than expected; economists had predicted the measure to tick down to 325,000. Meanwhile, jobless claims from the previous week were revised up by 6,000 to 326,000. The four-week moving average also declined 4,750 to 316,250. It’s official: Jobless claims are at the lowest level in seven years. Better yet, the more stable four-week moving average is also at the lowest level since late September. We’re seeing a significant decline in layoff activity partly due to the short-term staffing industry. Temporary jobs are now accounting for a much higher proportion of the workforce.
Wholesale Prices On the Rise
In March, wholesale prices jumped 0.5%. Economists had anticipated a 0.1% increase, so this was more dramatic than expected. This Food prices increased, as well as prices at clothing and jewelry retailers. Energy prices fell. Excluding food and energy prices, which tend to be more volatile, the core PPI increased 0.3%. This is the largest such increase since June. As dramatic as this monthly rise seems, inflation remains in check over the long term. Over the past 12 months producer prices have risen just 1.4%, well below the 2% target established by the Fed.
Have a nice weekend,