Of course, $1.75 trillion doesn’t go as far as it used to, not with prices rising the way they have the past few months. That—the ongoing reemergence of inflation—was the biggest economic story during a week that also brought updates on home sales, consumer sentiment, small business optimism, and more.

Monday

Oil Stuff

Both gas and diesel prices fell again during the week ending June 8^th. The Strait of Hormuz is still closed, and yet oil prices have fallen below $90/barrel, nearing levels not seen since early March. There are several reasons for the surprisingly low price of oil, perhaps the greatest being a sharp decline in Chinese oil imports that has freed up supply for the rest of the world.

Regarding a deal to reopen the Strait, one could happen “soon, very soon,” which has somehow been true for most of the past three months.

TSA Checkpoint Travel Numbers

Air travel has rebounded and is now trending about 1% above year-ago levels. This slight bounce is at least partially due to the World Cup.

Tuesday

Existing Home Sales

Existing home sales (i.e. not newly built) increased about 3% in May and are up modestly on a year-over-year basis. Median sales prices are up just 1.3% year over year as home prices remain tame even as housing affordability remains a major issue.

NFIB Small Business Optimism Index

Small business owner optimism declined in May as they struggled with “significant and unpredictable hikes in fuel prices, which are more challenging for small businesses to pass on to their customers compared to their larger corporate competitors.” A net 36% of small business owners reported raising their prices in May, well above the historical average of 13%.

FDA Approves Sunscreen with Bemotrizinol

The FDA has finally approved a superior form of sunscreen. If “finally” seems dramatic, consider that the European Union approved this kind of sunscreen 26 years ago, and the FDA has been working on getting it approved for over a decade.

What does this have to do with the economy? Not much, but Zack is extraordinarily pale, so this is worth some celebration.

Wednesday

Consumer Price Index (inflation)

Read more

(If you really want to be freaked out by this development, Google what a human screwworm case looks like.)

Flesh eating larvae aside, this week brought several strong data releases including on manufacturing, the labor market, and a lot more.

Monday

Construction Spending

Construction spending increased 0.4% in April and is up about 1% year over year.

Residential spending increased a healthy 0.8% for the month due to a sharp increase in single-family spending, though single-family investment remains subdued.

Nonresidential spending also increased slightly for the month, but that was entirely due to public sector activity. Private nonresidential spending actually decreased in April, although that was mostly because of manufacturing megaprojects winding down (a topic we covered at length in our post from yesterday).

ISM Manufacturing PMI

Manufacturing activity grew for the fifth straight month in May, according to this survey of industry purchasing managers (i.e., the people in charge of buying inputs). That’s the good news. The bad news is that the prices component remained sky-high, and high diesel prices are really starting to hurt, according to respondents’ comments.

Tuesday

Job Opening & Labor Turnover Survey (JOLTS)

The number of open, unfilled jobs rose sharply in April and is now at the highest level since May 2024.

More importantly, there’s now more than one job opening for every unemployed person for the first time since the middle of last year. This suggests the labor supply is tightening, and that could lead to faster wage increases over the coming months.

That increase aside, it remains a low-hire, low-fire, low-quit labor market. There just isn’t a lot of churn going on at the moment.

Oil Stuff

Both gas and diesel prices fell considerably during the week ending June 1^st despite the Strait of Hormuz remaining closed. Oil prices are hovering in the low $90s, well below where they were over the past several weeks and way above where they were prior to the conflict in Iran.

Oil markets seem optimistic about a near-term resolution (or about the market’s ability to adjust to a long-term closure) and unconcerned by steadily falling crude oil stockpiles.

Wednesday

ADP Employment Report

Read more

U.S. employers added an impressive 172,000 jobs in May, and March and April’s estimates were revised up by a combined 93,000 jobs. This tramples expectations and suggests the wobbles of 2025 and early 2026 are now decidedly behind us.

There’s not much to dislike here. The unemployment rate stayed at a perfectly acceptable 4.3% (it actually fell slightly when you take it to the hundredths). Prime age (25-54) labor force participation inched up and is close to a cyclical high. Young adult unemployment improved slightly, and fewer people are working part-time for economic reasons.

If you really want to nitpick, long-term unemployment (at least 27 weeks) inched up and is at a cyclical peak, but it’s not particularly high by historical levels, about the same as it was in 2017.

And really, there’s no need to nitpick. Job gains were broad-based by recent standards, though healthcare and leisure and hospitality still dominated growth.

Government also added a surprising 52,000 jobs for the month, the majority of which were noneducational local government positions.

The financial activities sector lost another 22,000 jobs for the month, and employment in that category is now down by more than 100,000 over the past year. While these losses are spread across subsectors, insurance carriers have been hit particularly hard, shedding about 73,000 jobs since May 2025.

For the labor market and broader economic resilience, today’s report is purely good news. And for anyone working in an interest rate segment, today’s report is…I don’t want to say “bad,” but decidedly less good.

Rate Hikes Are (Probably) Coming

The Fed has two jobs: maximize employment and keep inflation at a 2% annual rate. Today’s blowout report suggests the employment side of the mandate is in good shape, while recent inflation data shows price increases are speeding up.

As a result the Fed is now more likely to raise rates then cut them, and those hikes could come sooner than previously expected.

What’s Next

This week was packed with data releases, and we’ll cover all of them in Week in Review, our every-Friday post that gives you everything you need to know about the economy in a breezy, five-minute read.

That will be out in the next few hours and is just for paying subscribers. If that’s not you and you want it to be, just click the button below:

Subscribe now

The computer/electronic/electrical manufacturing subsegment experienced the boom of all booms starting in mid-2021.

Spending in the category surged from less than $8 billion per year to a peak of about $126 billion in mid-2024, a stunning 1,500%+ increase.

The CHIPS Act deservedly gets a lot of credit for this, though it wasn’t signed until August 2022, about 12 months after the meteoric rise began.

Why did the boom start before the law was signed?

1. The semiconductor shortage spurred investment

2. The CHIPS Act didn’t just poof into existence in August 2022. Companies knew that it (or something like it) was in the works

3. Interest rates were historically low

4. This category also includes batteries, so other investments (like EVs) helped

5. This data series is nominal, and construction input prices took off in early 2021

Spending in this category has been falling—nearly as quickly as it rose—since late 2024. The construction intensive part of CHIPS Act megaprojects is winding down, EV supply chain investment has slowed, and interest rates have risen sharply.

This rapid rise and fall has made it difficult to assess the broader nonresidential construction segment. Including that subsegment, private nonresidential spending has been in decline since late 2023.

Excluding that one subsegment, however, all other private nonresidential spending began to rebound at the start of 2025 and is less than 1% below the December 2023 all-time high.

And because we know you’re wondering: data centers account for 46% of the increase in all other nonresidential spending (the green part of the above graph) since January 2025. That’s a lot, but there’s still been modest growth across the remainder of the segment.

Big picture: the headwinds causing the computer/electronic/electrical manufacturing construction slowdown remain firmly in place, and the subsegment will continue to shrink over the next couple quarters. That will drag on total nonresidential spending, an important consideration when viewing the aggregate data.

What’s Next

Next up is Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five-minute read.

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Week in Review is only for paying subscribers. If that’s not you and you want it to be, just click the subscribe button.

The Jones Act mandates that any ship taking goods from one U.S. port to another be:

1. U.S. built

2. U.S. owned (at least 75%)

3. U.S. flagged

4. U.S. crewed (at least 75%)

This law, technically called the Merchant Marine Act of 1920, is the absolute worst. Some of the drawbacks include:

• It dramatically raises shipping costs: U.S.-built container ships can cost about 5x the average global price (or more), a direct result of the protectionist policy, while U.S. crews command higher labor costs.

• Those high building costs mean there’s very few Jones Act compliant ships. One source estimates there are just 92 Jones Act-compliant oceangoing cargo ships, less than 0.2% of the global fleet.

• There’s not much trade activity between U.S. ports, which diverts trade to more expensive rail and truck routes.

• The law is particularly painful for isolated states and territories like Alaska, Hawaii, and Puerto Rico because international ships can’t bring them goods from U.S. ports.

So yes, there are a lot of drawbacks, but at least the Jones Act has kept the U.S. shipbuilding industry healthy and hale. Except, no, it hasn’t done that at all. Despite a century of protection, the U.S. commercial shipbuilding industry remains tiny by global standards, can’t meet our domestic needs, and accounts for a negligible share of worldwide ship production.

Consider that “China’s largest state-owned shipbuilder built more commercial vessels by tonnage in 2024 than the entire U.S. shipbuilding industry has built since the end of World War II.”

What if We Repealed the Jones Act?

No need to guess! It’s been suspended since March 18^th to ease energy prices during the conflict with Iran, a move that confirms that the Jones Act does, indeed, raise prices.

As of May 13^th, 45 foreign-flagged vessels had taken advantage of the suspension, according to this Cato review. Roughly 4x more fuel was shipped from the Gulf Coast to the western U.S. in the first 50 days of the waiver than in all of 2025.

This has provided critical relief to prices at a time when inflation is once again on the upswing. The waiver is currently set to expire on August 16^th, but it’s not out of the question that it gets extended again, especially with midterm elections just a few months after that.

Regarding full repeal, don’t get your hopes up. The Jones Act lobby, comprised of maritime unions and domestic shipbuilders, is a tough one to beat.

What’s Next?

Boy, do we have some Policy Gripes in the pipeline. For the time being, we’ll try to get a construction post out later this week before Friday’s Week in Review. Week in Review is only for paying subscribers. If that’s not you and you want it to be, just click the button below:

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Monday

Memorial Day

Check out our piece on Memorial Day cookout prices, if you missed it.

Tuesday

Conference Board Consumer Confidence Index

U.S. consumer confidence fell slightly in May, as a poorer view of the current situation was slightly offset by an improvement in forward looking (six months ahead) expectations. Two-thirds of consumers say they’re cutting back on spending due to rising prices.

S&P Cotality Case-Shiller Home Price Index

Nationwide home prices were up just 0.7% for the year ending in March 2026. That’s a very modest increase, and yet housing affordability remains a massive issue.

Oil Stuff

Oil prices plunged this week as the U.S. and Iran have “the makings of a deal.” We’re back below $90/barrel, and while that’s a big improvement, that’s still more than $20/barrel more expensive than in February.

And while ships have started moving toward the Strait of Hormuz, they haven’t really started moving through it.

Both gas and diesel prices fell slightly during the week ending May 25^th, but don’t expect pump prices to plunge back toward pre-conflict levels. Why? Because of rocket and feather pricing dynamics: consumer prices blast off like a rocket when underlying wholesale prices increase, but they drift lower like a feather when those wholesale prices subside. This phenomenon is technically called asymmetric price transmission, for those interested in that kind of thing.

TSA Checkpoint Travel Numbers

Air travel this holiday weekend fell about 1% short of the 2025 Memorial Day peak. Optimistically, that’s not bad given soaring airfares. Pessimistically, you’d still prefer to see year-over-year growth.

Wednesday

Mortgage Applications

Read more

Multifamily construction boomed in 2021-23. The number of units under construction surged to nearly 1 million, the highest level on record.

Multifamily building conditions were perfect. Both borrowing costs and vacancy rates were historically low.

While rent growth was historically high.

Those tailwinds flipped around and are now gusting directly in the industry’s face. Borrowing costs and vacancy are stubbornly high, rent growth is virtually nonexistent, and materials price escalation is heating back up.

The good news is that the market has stabilized over the past few quarters, with both starts and permits approaching the pre-pandemic level.

Despite this stabilization, the market won’t fully rebound until borrowing cost fall and rent growth picks up.

What’s Next

Next up is Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five minute read.

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It’s not all bad. Serve chicken instead of burgers and you’ll actually spend less than you did last year. Beer prices have risen at a slower pace than inflation, and breakfast has gotten cheaper with egg prices down almost 40% year over year.

A few assorted thoughts on these prices in no particular order:

Cattle Herds are Shrinking

U.S. cattle herds have pretty steadily shrunk since the 1970s. We haven’t had this few cattle since the 1950s, when there were about 170 million fewer Americans. Broadly, that’s why prices are so high: demand for beef hasn’t changed, and there’s less of it to go around.

There’s also trade policy at work here. We tightly limit beef imports using a tariff-rate quota (TRQ). Before we hit the quota, beef imports face a low tariff. After that, they face a prohibitively expensive one.

In February, President Trump temporarily raised that quota in an effort to lower beef prices. It was then rumored that Trump would entirely suspend the TRQ, but those efforts are now indefinitely delayed despite ongoing beef price escalation because, no way around it, the beef industry punches above its weight class when it comes to lobbying.

While cattlemen’s gross political contributions are relatively modest, cattle production is concentrated in low-population states where the money required to win a Senate race is much lower. It only takes a few senators to influence policy, so the backing of, for instance, the six senators from Kansas, Oklahoma, and Montana can go a long way when it comes to keeping beef quotas in place.

And while cattle producers don’t want more imports, they also aren’t inclined to expand their herds. Expanding a herd means retaining heifers for breeding instead of selling them, and that’s particularly costly (and risky) when beef prices are so high. This is the type of market distortion that can arise when industries are protected from competition.

Beef prices probably aren’t coming down anytime soon, and they may start rising even faster because…

The Screwworm Strikes Back

In the 1950s, the U.S. eliminated screwworm flies—a deadly parasite that can decimate cattle herds—by mass-producing male screwworms, sterilizing them with radiation, and then releasing them into the wild.

Female screwworms only mate once, so when they tried en masse to mate with the sterilized males, the number of screwworm flies plummeted until the entire U.S. population was eliminated. We then pushed this effort south through Mexico and into central America, creating a containment barrier in Panama.

This is awesome, science fiction-worthy stuff.

The thing about science fiction is that the bad guys usually strike back, and that’s happening right now.

Screwworms recently broke through the containment barrier and have been detected in Mexico—there are several reasons, and you can read more here if you’re really interested—raising fears that they’re going to find their way back to the U.S.

We’re ramping up prevention efforts, but it’s a real risk for beef prices.

Tomatoes Smushed from All Sides

In July 2025, the White House got rid of an agreement that allowed Mexican tomatoes to enter the U.S. duty-free. This instantly pushed prices higher because about 65% of fresh tomatoes sold in the U.S. come from Mexico. More recently, weather has pummeled tomato production, with freeze damage in Florida and excessive rain in Mexico.

The end result: tomato prices are up about 55% since we started taxing Mexican tomato imports less than one year ago.

Egg Prices Come Crashing Down

You don’t hear as much about egg prices as you did in early 2025, when prices surged to over $6 a dozen. That’s because the cost has cratered, falling more than 60%.

The high prices were due to bird flu outbreaks devastating flocks. Those outbreaks have faded. Egg production has improved. Prices have fallen.

This is a fairly typical commodity cycle. There’s a supply disruption, prices surge, that provides a strong incentive to increase production, supply floods the market, and prices crater.

Looking Ahead

We’ll have a construction specific post out later this week (free for all subscribers). Next up after that is Week in Review, our every-Friday post that gives you everything you need to know about the economy in a breezy five-minute read. Week in Review is only for paying subscribers. If that’s not you and you want it to be, just click the button below.

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Monday

NAHB Housing Market Index

Homebuilder confidence improved in May, but it’s still hovering at mid-2012 levels (not a great time for homebuilding, if you’ll recall). What’s interesting here is that the measure is unchanged from February, when mortgage rates briefly dipped below 6%. Regionally, homebuilders are most confident in the Midwest and least confident in the West.

Oil Stuff

As has been the case the past few weeks: the Strait of Hormuz is still closed and oil prices are still above $100/barrel.

Gas prices inched just barely lower to an average of $4.62/gallon (week ending May 18^th), while diesel prices slipped to $5.60/gallon.

Why are gas prices flat while the Strait is still closed? We’ve released a stunning 31 million barrels of oil from the Strategic Petroleum Reserve since mid-April. That’s the fastest four-week drawdown ever, and the pace is increasing.

So for now, we’re padding the global oil supply with reserve releases, and that can last for another couple months.

TSA Checkpoint Travel Numbers

Air travel climbed just barely above year ago levels this week, an encouraging sign heading into the Memorial Day weekend.

Tuesday

Pending Home Sales

Pending home sales, which are supposed to show us what actual home sales will look like in a few months, rose modestly in April and are at the highest level since November. NAR chief economist Lawrence Yun notes that “Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate. All efforts need to be focused on boosting housing supply.” He’s not wrong.

Wednesday

Fed Meeting Minutes

Read more

Which is to say, oil-market-induced pain isn’t limited to gas stations.

On the data front, this week brought us some updates on inflation (hot hot hot!), retail spending, small business optimism, and more.

Monday

Existing Home Sales

Sales of existing homes (i.e., not newly built) inched 0.2% higher in April, but they’re still really low. The better news is that inventory increased to the highest level since last October, but it’s still a pretty bleak housing market.

Oil Stuff

The Strait of Hormuz is still closed and oil prices are still above $100/barrel. Gas prices are, unsurprisingly, still rising, up to an average of $4.63/gallon during the week ending May 11^th, while diesel prices stayed put at $5.64/gallon.

TSA Checkpoint Travel Numbers

Air travel volumes remain down on a year-ago basis. The best thing we can say about this is that the situation isn’t getting worse (at least not yet).

Tuesday

Consumer Price Index

Consumer prices surged for the second straight month in April. While that had a lot to do with rising energy prices, core inflation (excludes food and energy) also came in way too hot, increasing at the fastest pace since January 2025.

Consumer prices are now up 3.8% over the past year. That’s the largest annual increase since 2023.

It’s pretty clear we’re moving in the wrong direction on the inflation front, and rate hikes now appear more likely than rate cuts in 2026.

NFIB Small Business Optimism Index

This measure of small business confidence rose slightly in April but is still pretty low by historical standards.

The most interesting part of this release is the comments, specifically regarding how owners are struggling to find both skilled and unskilled workers. The labor supply looks to be tightening again. To the extent that boosts labor costs, it’s bad news on the inflation front.

Wednesday

Producer Price Index

Read more

Monday

Senior Loan Officer Opinion Survey (SLOOS)

Lending standards remained extremely tight in April, based on this Fed survey of bank loan officers. Banks have on net tightened standards for construction loans in 17 consecutive quarters. Not great!

Oil Stuff

The Strait of Hormuz is still very much closed, and still-high oil prices continue to bounce around in response to on-again, off-again, on-again, (etc.) peace talks.

Gas prices jumped to an average of $4.58/gallon during the week ending May 4^th, while diesel prices shot up to $5.64/gallon. It’s a nice time to not be driving.

TSA Checkpoint Travel Numbers

Air travel volumes remain about 1-2% below year-ago levels. Keep an eye on this as sky-high jet fuel prices start to bite.

Tuesday

U.S. Trade Balance

The trade deficit surged 4.4% in March as imports rose faster than exports for the month. This has a lot to do with AI—we’ve imported $93 billion of computers through the first three months of 2026. That’s up more than 100% from the first three months of 2025. Notably, tariffs do not apply to most data center inputs.

Job Opening & Labor Turnover Survey (JOLTS)

Hiring improved in March, accelerating to the fastest level since the first half of 2024, albeit one that’s pretty slow by historical standards. Both the quit rate and hire rate inched higher for the month but remain pretty low.

Big picture, there was a bit more labor market churn in March, but overall conditions remain stagnant.

New Home Sales

Sales of newly built homes increased in March, but that was from the extremely low levels of February. New home sales are down about 3% year-to-date. That’s disappointing given how much mortgage rates have fallen since early 2025.

ISM Services PMI

The services side of the economy grew for the 22^nd straight month in April, according to this survey of industry managers. The bad news is that the prices component continues to rise at the fastest pace since 2022. Inflation is heating up.

Wednesday

ADP Employment Report

Read more

U.S. employers added 115,000 jobs in April after adding 185,000 in March, meaning that employment has now expanded in two consecutive months for the first time since April and May of 2025. One the one hand, this is an encouraging sign for the economy. On the other, we added jobs in every single month from October 2010 to February 2020, all 113 of them, and are we really going to celebrate a two-month growth streak?

The good news is that the unemployment rate held steady at 4.3%, and the prime age (25-54) labor force participation rate remained very high by recent standards.

Digging into the details, the warehouse clubs and supercenters and courier and messengers industries added a collective 56,200 jobs for the month, and healthcare employment continued its unceasing upward climb.

Information (think media and tech) continues to lose jobs, and that’s got a lot to do with a roughly 5% year over year decline in computing infrastructure providers, data processing, web hosting, and related services employment. It’s tempting to chalk this up to AI replacing programming jobs, but tech companies hired a ton of people—arguably too many—during the low interest rate period of 2020 to 2022. Even with recent losses, the industry still employs about 29% more people than it did six years ago.

Maybe the biggest takeaway: the federal government lost another 9,000 jobs in April and now employs fewer people than at any point since 1966. Feds now account for just 1.68% of all jobs. That’s the smallest share since the BLS began collecting this data in 1939.

The Upshot

This was a good enough jobs report. Unemployment remains relatively low and job growth has picked up over the past two months. The big question is if this momentum can hold up under the weight of sky-high gas prices.

What’s Next

This week was packed with data releases, and we’ll cover all of them in today’s Week in Review, our every-Friday post that gives you everything you need to know about the economy in a breezy, five-minute read. That will be out in the next few hours and is just for paying subscribers. If that’s not you and you want it to be, just click the button below:

Subscribe now

Highway and street construction spending surged after the bipartisan Infrastructure Investment and Jobs Act was passed in November 2021. At a glance, this was an extremely successful bill.

If you’re wondering why we felt compelled to say, “at a glance,” the above graph shows nominal (not inflation-adjusted) highway and street construction spending. The DoT’s National Highway Construction Cost Index let’s us take a deeper look, and the picture isn’t pretty.

Adjusted for the cost of building new highways, which is up about 73% since the IIJA was enacted, spending in the category is actually down 7.5%.

The NHCCI reflects winning bid prices, so it’s an all-in cost measure. What made it rise so rapidly since the end of 2021?

It’s tempting to blame labor scarcity and costs. Average hourly earnings for nonmanagerial highway and street construction workers are up about 32% over the past five years. That’s a lot, though not enough to fully explain a 73% overall increase in costs.

It’s also tempting to cite project labor agreements, but the vast majority of highway and street construction activity is, at least technically, funded at the state level (call it federally assisted, not federally funded). Of course, PLAs are used on these projects in certain union-friendly states and that raises prices via higher labor costs and fewer bidders.

Asphalt prices, up more than 40% since IIJA was enacted, have certainly played a part, as have other input prices, most of which are up significantly since 2021.

Rampant input and labor cost escalation also meant contractors had to build in larger contingencies and price for greater risk.

The biggest explanatory factor, however, is good ol’ supply and demand. IIJA passed at a time when the demand for construction services was greater than what contractors could supply. Housing was booming, as was the warehouse and manufacturing categories. Rates were low, and even segments that weren’t quite booming were snapping back to life.

Less contractor capacity during the first few years of IIJA led to fewer bids. Fewer bids led to higher prices.

The upshot is that taxpayers are getting less roadway per buck than it looked like we might when the IIJA was initially enacted.

What’s Next

This week brings us a ton of jobs data, two months of construction spending data, and a few different housing market indicators. We’ll cover that and a lot more in Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five-minute read.

Subscribe now

Week in Review is only for paying subscribers. If that’s not you and you want it to be, just click the subscribe button.

Whether you’re drinking to celebrate all-time stock market highs or to soften the blow of this week’s dreadful inflation data, it’s hard to complain about lower Scotch taxes.

Monday

Oil Stuff

The Strait of Hormuz is still very much closed, oil prices surged again this past week, and we’re nearing a point where summer travel could become prohibitively expensive for many Americans.

Gas prices bounced to $4.26/gallon during the week ending April 27^th. That’s the highest since the middle of 2022, and it looks like we’re going higher. Diesel prices fell to a still very elevated $4.35/gallon.

TSA Checkpoint Travel Numbers

Air travel volumes continue to slide relative to year-ago levels. Higher jet fuel prices are going to do a number on our airlines.

Tuesday

Conference Board Consumer Confidence Index

This measure of consumer sentiment inched up in April, but it reflects April 1-22, and the oil situation looked better 2-3 weeks ago.

Confidence by age is the most interesting part of this release. Has a bad labor market for young adults stressed out their Gen X parents? Why are Baby Boomers feeling worse than the Silent Generation? Is rising Millennial confidence because AI makes it feel like they got the last chopper out of Vietnam?

S&P Cotality Case-Shiller Home Price Index

Home prices increased modestly in February, ending a streak of 7 straight monthly declines. Even so, prices are up just 0.7% over the past year, though high mortgage rates mean housing affordability remains a huge problem.

Wednesday

Fed Interest Rate Decision

Read more

Geopolitical and oil market volatility aside, this was a quiet week for economic data releases.

Monday

Oil Stuff

Oil prices, as mentioned above, have rebounded from last Friday’s lows and are back above $106/barrel as of this writing.

Gas prices fell to $4.18/gallon during the week ending April 20^th, though they appear to be rising again according to more real time data. Diesel prices also fell during the same week but at $5.40/gallon are still punishingly high.

There’s been a slight increase in traffic through the Strait of Hormuz, but nowhere near what needs to happen to alleviate pressure on oil markets.

TSA Checkpoint Travel Numbers

Air travel volumes have been below year-ago levels for more than a week. There’s still a chance that this just has to do with the timing of spring break, but given rising air fares and broader uncertainty, it wouldn’t be surprising if travel stays subdued over the next several weeks.

Tuesday

ADP Pulse Employment Data

Hiring picked up in late March and early April, according to this preliminary data from ADP. While this isn’t the most authoritative data source, it’s very plausible that job growth is accelerating.

Pending Home Sales

Pending home sales, which are supposed to give us an idea of what actual home sales will look like a month or two down the road, rose in February. That said, sales were down in January due to weather and likely fell again in March due to higher mortgage rates. Don’t put too much weight on this.

Retail Sales

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Of course, the Strait was supposed to reopen following the previous ceasefire agreement and didn’t, though markets certainly seem more optimistic this time around.

Monday

Existing Home Sales

Sales of existing homes (i.e., not newly built) fell 3.6% in March and were 1.0% lower than in March 2025. Blame mortgage rates.

Oil Stuff

Oil prices are falling off a cliff due to the alleged reopening of the Strait of Hormuz. That’s good news, because gas prices were unchanged during the week ending April 13^th, with the average at a still-punishingly-high $4.25/gallon. Diesel prices fell slightly but at $5.61/gallon are still up more than $2.00/gallon since the start of the year.

Going forward, this is the critical chart to watch.

Even if the Strait reopens and traffic through the Strait rebounds as quickly as it fell, we’ve still lost hundreds of millions of barrels of oil production due to the closure. That’s going to affect fuel prices for some time.

Tuesday

Producer Price Index

Prices received by U.S. producers rose sharply in March, but that had a lot to do with higher oil prices. Core prices (exclude food and energy) actually increased at a slower rate. While that’s mildly encouraging, higher energy prices will eventually translate into higher other prices, and the inflation outlook is not great at the moment.

NFIB Small Business Optimism Index

This measure of small business owner confidence fell in March and is at its lowest level since April 2025. That’s due to higher oil prices, which “spooked consumers and owners alike.”

TSA Checkpoint Travel Numbers

Well, air travel volumes slipped back below year-ago levels as of the week ending April 15^th. That could be because of the timing of Spring Break, or it could be because of the way higher jet fuel prices are pushing up airfares.

Wednesday

The Beige Book

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The bad news: your car can’t run on eggs, and the gas component of the consumer price index posted its largest monthly increase since at least the start of the data series in 1967.

Monday

ISM Services PMI

The U.S. service sector expanded for the 21^st straight month in March, according to this survey of industry managers. The bad news is that prices increased sharply, providing yet another sign that inflation is picking up.

Oil Stuff

Oil prices fell sharply following reports of a “ceasefire” and “reopening of the Strait of Hormuz.” We use quotes there because at least two sides of the conflict have yet to cease firing and, as of Friday, the number of ships passing through the Strait has actually decreased. The best thing we can say about the situation is that no civilizations have died.

Gas prices keep rising despite the two-week pause, with the average up to $4.25/gallon during the week ending April 6^th. Diesel prices have risen even faster, up to $5.64/gallon, more than $2.00/gallon more expensive than at the start of the year.

Tuesday

Durable Goods Orders

New orders for durable goods (things that last at least three years) fell for the third straight month, but that’s mostly due to the volatile transportation equipment category (think airplanes). Even without excluding transportation, though, orders were 8.1% higher during the first two months of 2026 than during the same stretch of 2025. Not bad!

TSA Checkpoint Travel Numbers

The rising cost of jet fuel hasn’t hurt U.S. air travel. Not yet, anyway. The number of people passing through TSA security remains up about 2.0% on a year-ago basis over the past week.

Wednesday

Fed Meeting Minutes

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This is referred to as a healthcare hiring boom, but traditional healthcare employment has risen at just a modest (doctor and dentist offices) to healthy (hospitals) pace over the past few years.

No, it’s the growing elderly population that’s driving (hopefully not at night) this rapid job growth.

The Senior Care Surge

Nearly half of those 1.7 million new jobs are in just two industries: nursing care facilities and services for the elderly and persons with disabilities. Those segments now employ an incredible 6.4 million people, and since the start of the pandemic, they’ve accounted for about 1 in every 7 new jobs.

This isn’t surprising. There are a lot of Baby Boomers. It will take a lot of labor to care for them.

Funding also plays a role here. The federal government spends roughly a quadrillion dollars on seniors every year, and that’s only a slight exaggeration. In 2025, federal outlays totaled $43,700 per retiree (65+) and just $4,300 per child/young adult.

If that fact is giving you mental health problems, well, good news.

Unpacking the Therapy Data

Employment at nonphysician therapy offices is up a staggering 146% since the start of the pandemic. The industry now has over 300,000 employees, about 10,000 more than in the entire state of Wyoming.

Employment growth at psychiatry offices has been a little slower—med school takes time and limits graduates—but is still up more than 50% since the start of 2020.

The driving force here is pretty clear: therapy is in. 60 million American adults received mental health treatments in 2024, a 50% increase from 2019, while about a third of adolescents used therapists in 2023.

If you had to bet on which industry will grow the fastest over the next few years, this would be a fine choice. And if you actually find yourself betting on this, find a therapist to treat your compulsive gambling disorder.

What’s Next

This week is packed with economic data releases, including two big inflation reports. We’ll give you everything you need to know about that in Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five minute read.

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Week in Review is only for paying subscribers. If that’s not you and you want it to be, just click the subscribe button.

Private construction spending has fallen by nearly 1% since the start of 2024. To the extent the segment has any momentum, it’s entirely confined to two categories: residential improvements and data centers. Without those two categories, private nonresidential spending would be down by a 9% over the past two years.

The data center boom has been much discussed, including in this newsletter, but the surge residential improvements has flown miles below the radar.

What’s driving the increase? A few guesses:

1. High mortgage rates cause some would-be-movers to instead change their current home to suit their needs.

2. An expectation of falling mortgage rates makes some will-be-movers start preparing their homes for the market.

3. Aging-in-place Baby Boomers.

4. The housing stock isn’t getting any younger.

This is pretty normal. Residential renovation work holds up better than other categories when activity contracts. About $1 in every $4 spent on private construction went to residential renovations in January 2026, just below the April 2011 all-time high.

What’s Next

Next up is a critically important inflation release on Friday. We’ll cover that and a lot more in Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five minute read.

Subscribe now

Week in Review is only for paying subscribers. If that’s not you and you want it to be, just click the subscribe button.

Monday

Texas Manufacturing Survey

Manufacturing activity expanded in March, according to this Dallas Fed Survey, albeit at a slower pace than in February. That’s not particularly interesting—it’s the comments from respondents are the juicy part of these surveys, and the comments did not disappoint.

Three examples that really cover the full range of business conditions:

1. From a computer and electronic product manufacturing respondent: “I am thinking about recommending to our board to close the company.”

2. From a machinery manufacturing respondent: “Spring has sprung. It’s truly like the balm of Gilead. After an extended period of ailment and woe, the healing has occurred and we are on our way to greater things. Our business growth thus far in 2026 is like a sweet fragrance that is healing our loss and hardship from prior years.”

3. From a food manufacturing respondent: “High density Hispanic channels are down. Costs are up, and freight is increasing fast. Tariff chaos has wreaked havoc with all of our export customers and seasoning suppliers.”

Yes, the comments are interesting, but in the aggregate, don’t provide too much insight regarding how the overall economy is performing, or even insight into that state’s manufacturing segment. The point is that this is an economy with big winners and losers. It’s all or nothing for many.

Oil Stuff

Gas prices continued their rapid climb, rising to a nationwide average of $4.13/gallon during the week ending March 30^th. Diesel prices also kept soaring, up to $5.40/gallon. That’s a staggering $1.92/gallon higher than at the start of 2026.

Those prices are going to keep rising, as of this morning (Friday), U.S. oil prices are trading above $112/barrel.

Put simply, the Strait of Hormuz needs to open, and it needs to open soon. Can’t we all just get along?

Tuesday

Job Opening & Labor Turnover Survey (JOLTS)

The U.S. hiring rate (employees hired/all jobs) fell to 3.1% in February. That’s the lowest level since April 2020, when the economy lost 20 million jobs and the unemployment rate surged to 15%.

Of course, just 1.1% of workers were fired or laid off in February. That’s exceptionally low, especially compared to the historically high 8.6% layoff rate in April 2020.

Employees were also reluctant to leave their jobs in February, with the 1.9% quit rate matching the lowest level since—you guessed it—April 2020.

The takeaway here is that it remains a great time to have a job and an extraordinarily bad time to need one. We’ll get to the blockbuster jobs report in a minute or two but let me foreshadow this by telling you that I am skeptical about the headline number in the context of other readings.

Conference Board Consumer Confidence Index

Consumer sentiment improved slightly in March, but I don’t think that captures some of the pump-price-related pessimism that probably didn’t surface until the end of the month. Despite the modest increase, confidence still appears to be trending downward since its 2021 peak.

Perhaps most importantly, consumer inflation expectations surged in March. That can serve as a self-fulfilling prophecy. If firms know that consumers expect higher prices, they’ll meet those expectations.

TSA Checkpoint Travel Numbers

Air travel survived the TSA line craziness and remains above year-ago levels, jumping out of the frying pan only to land in the surging-jet-fuel-price fire. Airfares have already increased sharply, and this is nothing compared to what will happen if the Strait of Hormuz remains closed for another month or two. Let’s be friends.

Wednesday

President Trump’s Address

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