Contradictory Week in Review
Oil, jobs, housing, & more
Consumer sentiment is at an all-time low, stocks are at an all-time high, gas prices are soaring, the Strait of Hormuz is still closed, and U.S. employers added jobs in consecutive months for the first time since the first half of 2025. As if that wasn’t enough, this week also brought us another big legal ruling on tariffs, some downbeat mortgage data, and 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 4th, 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 22nd 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.
