Gas Prices, an Interest Rate Decision, & More

Week in Review: Oct. 30-Nov. 3

This week was loaded with economic data releases. Some of those, like the Employment Cost Index, the FHFA Home Price Index, and the Consumer Confidence Index, suggest the economy is still at risk of downturn. Others, like record oil production and plunging gas prices, paint a rosier picture.

Monday

Gas Prices

Gas prices fell for a sixth consecutive week (and yet, war rages in the Middle East). At $3.60/gallon, prices are at their lowest level since the end of March. At current prices, Americans will spend about $134 million less per day on gasoline than they did one month ago.

Diesel Prices

Diesel prices fell for the third time in four weeks and, at $4.45/gallon, are $0.87/gallon cheaper than during the same week last year.

TSA Checkpoint Travel Numbers

The number of people passing through TSA security during the last week of October was about 6% higher than during the same week of 2019. As you can see below, travel slows down heading into winter, and the gap between this year and 2019 has closed over the past week or two.

Tuesday

Employment Cost Index

The cost of compensating employees increased 1.1% during the third quarter, which equates to about a 4.5% annual rate. That’s too fast (for the Federal Reserve; workers don’t mind as much)! It was also faster than the second quarter increase. Despite the uptick in the third quarter, the rate of increase has slowed since the fastest increase on record (+1.4%) in the second quarter of 2022. Big picture, this is still increasing too quickly, and it will probably need to slow to get inflation back to 2%. Higher for longer, baby. That’s the story on interest rates.

Home Prices

The FHFA Housing Market Index increased 0.6% in August—or at a 7.4% annual rate—and is up 5.6% over the past year. That’s not going to help with housing affordability at all.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index (horrible name) increased 0.4% in August but is up just 2.2% over the past year. This one has more regional granularity, so go poke around if you’re interested in pricing trends near where you live.

The Conference Board Consumer Confidence Index

This measure of consumer sentiment fell in October. The expectations component of the index was once again below 80, the level that has historically signaled a recession within the next 12 months. Take that with a grain of overly pessimistic salt, though; the index has been below 80 for much of the past two years and while there’s still no recession, it’s coming.

Wednesday

Fed Interest Rate Decision