The Bad Data Will Continue Until Morale Improves

Week in Review: Feb. 24-28

Don’t look now, but this economy is beginning to falter a bit. Economic data came in weaker than anticipated for a third consecutive week and financial markets are choppy. Even as expectations for higher inflation become more pervasive, the yield on the 10-year Treasury fell, indicating that more investors are heading for safe havens. Macroeconomically, we now have (arguably) constraining monetary and fiscal policymaking (thanks, Elon), which sets the stage for meaningful economic slowing during the quarters ahead.

Or it could just be the bad weather in January.

Monday

Gas Prices & Diesel Prices

Gas prices inched down to $3.26/gallon this week but will start moving higher as soon as gas stations switch over to summer-blend gasoline. Diesel prices rose to $3.70/gallon. That’s the highest price since August but still way lower than one year ago.

TSA Checkpoint Travel Numbers

Air travel slowed dramatically over the past few days, according to TSA data, and is 3.0% below 2024 levels over the past week. It’s possible government layoffs have reduced travel volumes. I know conferences are being cancelled. For instance, I was supposed to speak on behalf of the Department of Energy in mid-April, but that conference has been cancelled as the Department “considers its fiscal priorities”. It’s also possible a few recent high profile plane crashes/incidents have spooked would-be flyers.

Tuesday

Conference Board Consumer Confidence Index

Consumer confidence plunged in February, posting the largest monthly decline in more than three years. Economic sentiment was great following the election but has since fallen off due to drastically increased uncertainty and stubborn inflation. Eggs and tariffs remain the talk of the town.

That said, we generally don’t put too much weight on sentiment readings—soft data like this matter way less than hard data—but the abrupt change in vibes is undeniable.

S&P CoreLogic Case-Shiller Home Price Indices

National home prices fell slightly in December but finished 2024 up 3.9%. That’s a smaller increase than in previous years, but housing affordability for would-be buyers is still atrocious with mortgage rates up near 7%.

Wednesday

Dockworkers Ratify New Contract