Thursday's Scoop: Energized☀️

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Here’s what you need to know today to inform your work, spending, and investments…

1. Layoffs are still historically low.

2. Business activity cooled in February.

3. Home sales picked up in January as mortgage rates fell.

Unemployment Rate: 3.7%
^{Still near the lowest rate in 50+ years}

Despite the big layoff headlines from big tech, media, and finance companies, businesses seem hesitant to cut workers. The Labor Department reported initial unemployment claims fell last week to 201,000. Continuing claims from those who have been out of work for consecutive weeks also dropped again, a good sign that people can find jobs.

Business activity slowed slightly in February, but the economy is still growing. S&P Global’s Purchasing Managers Index (PMI), which tracks manufacturing and service sectors, dipped slightly in February but still indicated expansion. Growth slowed in the services sector, which makes up most of the economy, but manufacturing snapped out of a downturn to a 17-month high. There were good indications of inflation cooling. S&P’s measure of prices paid fell to the lowest level since October 2020.

30yr Mortgage Rate: 7.1%
^{That’s up from 6.6% a year ago. (MBA)}
Median Home Price: $379,100
^{That’s up from $361K a year ago. (NAR)}

Home sales picked up in January as mortgage rates fell from their peak. Rates have gotten much more expensive since. According to the National Association of Realtors, sales of existing homes in the US increased by 3.1% in January but remained well below typical activity levels in the real estate market. Expensive borrowing costs and near-record home prices are driving away buyers and prompting current homeowners to delay selling. That’s kept supply at about half of what it was pre-pandemic and prevented home prices from falling much. Home buying has remained out of reach for low and middle-income Americans. Most of the sales in January were above $750,000, and nearly a third were all-cash sales, the largest percentage since June 2014.

The Market: ⬆️ +2.1%
S&P 500: 5,087.03
1Mo: +5% | 1Yr: +27% | 5Yr: +81%

The market soared to a new record high today, fueled by enthusiasm for the potential for Artificial Intelligence to revolutionize the economy following yesterday's blowout earnings report from Nvidia, the most dominant AI chipmaker.