Concerning Week in Review

Rates, Retail Sales, Housing, & More

For a week with no data releases on Thursday or Friday, this one was loaded with important economic news, including a Fed interest rate decision, some disturbing signs from the housing market, shrunken retail sales, a potential new American war, and more.

Monday

Baker Hughes Rig Count

The number of active U.S. oil rigs fell yet again last week and is now down about 10% from the same week last year. By contrast, the number of gas rigs is 15% higher. The overall rig count is down 6%. We’ll see if the spike in oil prices over the past week due to intensifying conflict in the Middle East has any effect on rig counts. One suspects that those who make such decisions are presently embracing a wait-and-see attitude.

Gas Prices & Diesel Prices

Gas prices increased slightly to $3.27/gallon this week, which is still really low. Diesel prices rose $0.10 higher per gallon and diesel remains reasonably cheap by recent standards. Again, we’ll see how higher oil prices impact gas/diesel prices over the next couple weeks. I expect those prices to rise, because those who decide such things raise prices when they can.

TSA Checkpoint Travel Numbers

The summer travel season is still lagging last year’s, with TSA travel numbers down about 1-2% on a year-over-year basis. Not great, but also not horrible.

Tuesday

Retail Sales

Retail spending came in way softer than expected in May, falling 0.9% for the month. There were sharp declines in spending at car dealerships, gas stations, hardware stores, grocery stores, and department stores.

That’s not great, but it’s also not quite as bad as it seems. If we exclude gas stations (gas prices are lower so people are spending less there), retail sales are 4.3% higher through the first five months of 2025 compared to the same span last year. So, the trend is not particularly encouraging, but spending is still relatively elevated in the context of rising wages and still low unemployment.

NAHB/Wells Fargo Housing Market Index