Read the highlights of this week’s commentary from Helios:
- US consumer spending fell 0.5% in January, marking the largest monthly decline in nearly four years. The drop was driven by lower auto sales and reduced spending on goods like recreational items, likely influenced by cold weather and a post-holiday slowdown. Despite this spending decline, incomes rose 0.9%, boosted in part by Social Security adjustments, lifting the savings rate to its highest level since June.
- On the inflation front, the Federal Reserve’s preferred measure—the core personal consumption expenditures (PCE) index—rose 0.3% in January and 2.6% from a year ago, matching the smallest annual increase since early 2021. While core goods prices increased, inflation in core services remained subdued.
- Mortgage rates in the US fell for the sixth straight week, with the 30-year average dropping to 6.76% from 6.85%. High borrowing costs have slowed home sales, with existing home contracts at a record low in January. However, active listings rose nearly 10% from last year, helping ease inventory constraints and offering signs of improvement.
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