While the data releases were plentiful, many are made less significant in consideration of the current disruption with the administration and the oncoming inflation data reports with the CPI and PPI arriving next week. The largest and most noteworthy report this time is the Job Report numbers, which will help give a clearer idea on the state of the job market. With the mass federal layoffs, there is much uncertainty, but the labor market is still holding up in light of things. The most pressing data to be released is the predictions for GDP, which has shown to have shown a deflationary value. As long as the inflation data remains consistent then there is little chance the Federal Reserve will consider increasing the interest rates once again. The silver lining in all the reports is the Manufacturing PMI data is noting that the manufacturing sector is still showing strong growth.

Job Reports

The U.S. added a decent 151,000 new jobs in February, but the labor market could soften up in the months ahead as the effects of tariffs, federal spending cuts and mass layoffs of government workers percolate through the economy.

Manufacturing PMI

The seasonally adjusted S&P Global US Manufacturing Purchasing Managers’ Index recorded 52.7 in February, up from 51.2 in January. It was the second successive month that the index has pointed to an improvement in the health of the manufacturing sector, with the rate of growth the best since June 2022. Growth was underpinned by noticeable upturns in both production and new orders. There was some evidence that sector expansion was partially driven by advanced purchases ahead of likely price increases and possible supply disruption related to further tariff impositions in the coming months.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.15% with the current rate at 5.79%
• 30-Yr FRM rates saw a decrease of -0.13% with the current rate at 6.63%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.05% for this week. Current rates at 6.17%
• 30-Yr VA rates saw an increase of 0.05% for this week. Current rates at 6.20%

Jobless Claims

Initial Claims were reported to be 221,000 compared to the expected claims of 235,000. The prior week landed at 242,000.

What’s Ahead

The major inflationary reports ahead this week with both Consumer Price Index and Producer Price Index are expected to come in line with the previous quarters.

The PCE Index has aligned with expectations, and as the Federal Reserve’s preferred measure of inflation, it eases the sense of urgency for policy action. GDP data has also indicated continued economic growth, though this is tempered by future forecasts predicting a potential economic contraction. This outlook is further reflected in the Consumer Confidence report, which has shown a significant decline since the change in administration. Uncertainty is evident across lending and broader markets, affecting all aspects of the economy.

PCE Index

The Federal Reserve’s preferred PCE index rose by 0.3% last month, according to government data released on Friday. This increase matched the forecasts of economists surveyed by The Wall Street Journal. Year-over-year inflation edged down slightly to 2.5% from 2.6%, but it remains above the Fed’s 2% target.

GDP

An early look at the first quarter points to a somewhat similar rate of growth in the 2% to 2.5% range. However, a severe cold snap in January and a post-holiday lull in economic activity could weigh on GDP.

Consumer Confidence

Consumer confidence, which surged to a post-election high after Donald Trump’s victory, has faded as the public adjusts to major shifts in U.S. economic policies, including trade and tariffs. In February, the Conference Board reported that its consumer confidence index fell by 7.0 points to 98.3, an eight-month low.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.01% with the current rate at 5.94%
• 30-Yr FRM rates saw a decrease of -0.09% with the current rate at 6.76%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.13% for this week. Current rates at 6.12%
• 30-Yr VA rates saw a decrease of -0.13% for this week. Current rates at 6.15%

Jobless Claims

Initial Claims were reported to be 242,000 compared to the expected claims of 225,000. The prior week landed at 220,000.

What’s Ahead

This round of job data should be particularly insightful as the first quarter of the year comes into focus. Additionally, Manufacturing PMI and the U.S. trade deficit stand out as unusually strong data points following the recent change in administration.