The trade deficit dropped significantly this month, resulting in the smallest gap in the last 16 years. This has been entirely driven by the ongoing gold rush and, to a much less impactful degree, businesses working their way around high tariffs. The unemployment reports, however, have shed another light, showing a steady trend of unemployment rising and reaching a four-year high as of last week.
This is somewhat offset by consumer sentiment, which showed a slightly positive increase alongside relative improvements in the economy. All in all, the data points to mixed results for the broader market. The upcoming week will be a much greater indicator, with all major inflation reports in the PPI and CPI scheduled for release.
Trade Deficit
The U.S. trade deficit plummeted 39% in October to reach the lowest level in 16 years, but the steep drop stemmed from an ongoing gold rush of sorts as well as efforts by businesses to work around high tariffs. The trade gap shrank to $29.4 billion in October from $48.1 billion in September, the government said Thursday. The October report was delayed by the federal shutdown.
Consumer Sentiment
The University of Michigan’s gauge of consumer sentiment rose to 54 in a preliminary January reading from 52.9 in the prior month. This marked the second straight gain and the highest level of sentiment since September. “Consumers perceived some modest improvement in the economy,” the survey found, although sentiment remains nearly 25% below last January’s reading.
Jobs Report
The unemployment rate climbed to a four-year high of 4.6%, according to a mostly tepid November jobs report. The economy lost 105,000 jobs in October and added 64,000 new jobs in November, the government said, with the report skewed by deferred resignations of federal workers.
Primary Mortgage Market Survey Index
- 15-Year FRM rates saw an increase of 0.02%, with the current rate at 5.46%
- 30-Year FRM rates saw an increase of 0.01%, with the current rate at 6.16%
MND Rate Index
- 30-Year FHA rates saw a decrease of -0.16%, with current rates at 5.69%
- 30-Year VA rates saw a decrease of -0.17%, with current rates at 5.70%
Jobless Claims
Initial claims were reported at 208,000 compared to expected claims of 210,000. The prior week’s total was 200,000.
What’s Ahead
CPI and PPI inflation reports are the major releases for next week, along with the usual employment data.