Thursday's Scoop: Wavering 🌤️

Hey friends - it was a short week. Short weeks sound nice but usually stink. How’d you make out? Either way, it’s Friday tomorrow.

Insiders, look out for the Weekly Scoop tomorrow.

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

1. Layoffs are still pretty low.

2. The economy started the year off slower than previously thought.

3. Foreclosures are rising.

Unemployment Rate: 3.9%
^{Still near the lowest rate in 50+ years}

Companies still seem to be avoiding layoffs. The Labor Department reported that initial unemployment claims rose slightly to 219,000 last week, still around average for a healthy economy. Continuing claims from those who have been out of work for consecutive weeks rose again, indicating that finding a job is getting a little more challenging. However, unemployment is historically low, and there are still more than 1.3 available jobs for every unemployed person.

The economy didn’t start the year as strong as economists thought. The Commerce Department revised its first-quarter economic growth estimate lower. Real US gross domestic product (GDP) grew at an annualized rate of only 1.3% in the first quarter, the slowest pace in nearly two years and less than half as fast as the fourth quarter. Consumer spending, which powers two-thirds of the economy, slowed even more than initially thought as Americans added less incremental money to their pocket after taxes and inflation. Household spending on goods declined enough to offset higher business spending on artificial intelligence. Government spending declined as defense bills pushed into the next quarter. Overall, the economy showed signs of strength, but the slowdown raises concerns about how long consumers can keep consuming at higher prices.

30yr Mortgage Rate: 7.1%
^{That’s up from 6.9% a year ago. (MBA)}
Median Home Price: $407,600
^{That’s up from $386K a year ago. (Existing homes - NAR)}

Foreclosures are rising quickly in certain parts of the country, particularly Florida and Texas. This uptick is driven by increasing property taxes, insurance costs, and mortgage rates that now top 7%. Higher costs are trapping some homeowners who cannot sell their homes or refinance their mortgages. Particularly in Houston, foreclosure filings surged by 37% in the first quarter compared to last year, marking the largest increase in the nation among major metro areas. This rise in foreclosures is unusual to see with unemployment near record lows. It's a stark reminder of the strain of higher borrowing costs.

The Market: ⬇️ -0.6%
S&P 500: 5,235.48
1Mo: +4% | 1Yr: +24% | 5Yr: +90%

The market drifted lower on Thursday as investors digested mixed signals about the economy. Financial updates from major retailers have demonstrated that companies with the best leadership are earning sales as shoppers grow more selective with their budgets.