Home values fell for a second straight month in April, according to the Zillow Home Value Index. However, after adjusting for inflation, real home values declined for a 12th consecutive month, hitting their lowest level in nearly four years.
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.
While April brought further welcome news on the inflation front, underlying consumer fundamentals painted a more concerning picture.
The S&P 500 posted gains every day this week, climbing 5.3% from last Friday.
The yield on the 10-year note ended May 16, 2025 at 4.43%. Meanwhile, the 2-year note ended at 3.98% and the 30-year note ended at 4.89%.
Consumer sentiment fell for a fifth straight month as ongoing economic uncertainty and inflation worries continue to drag down consumer attitudes. The Michigan Consumer Sentiment Index dropped to 50.8 in May, the second lowest reading on record.
In the latest report by the Census Bureau, building permits dropped to a seasonally adjusted annual rate of 1.412 million in April, the lowest level in almost a year. This marks a 4.7% decrease from March and a 3.2% decline compared to one year ago.
In the latest report by the Census Bureau, housing starts inched up to a seasonally adjusted annual rate of 1.361 million in April. This marks a 1.6% increase from March but a 1.7% decrease compared to one year ago.
Nominal retail sales in April were up 0.06% month-over-month (MoM) and up 5.16% year-over-year (YoY). However, after adjusting for inflation, real retail sales were down 0.16% MoM and up 2.76% YoY.
Industrial production was unexpectedly flat in April, lower than the forecasted 0.2% growth. Compared to one year ago, industrial production is up 1.5%.
Builder confidence fell sharply in May as uncertainty stemming from elevated rates, tariffs, building costs, and the cloudy economic outlook dragged builder sentiment to its lowest level in 18 months.
The Census Bureau's Advance Retail Sales Report for April showed consumer spending inched up last month, with head sales rising 0.1%. This comes on the heels of March's 1.7% surge in spending and was higher than the 0.0% forecast.
The latest Philadelphia Fed manufacturing index showed weak activity this month. The index rose nearly 22 points but remained negative for a second straight month at -4.0. The latest reading was better than the forecast of -11.3.
Manufacturing activity contracted for a third consecutive month in New York State, according to the Empire State Manufacturing May survey. The diffusion index for General Business Conditions fell 1.1 points to -9.2. The latest reading was worse than the forecast of -8.2.
Wholesale inflation unexpectedly fell in April, experiencing its largest monthly decline in five years. The producer price index for final demand was down 0.5% month-over-month after a flat reading in March. This was lower than the expected 0.2% growth.
In the week ending May 10th, initial jobless claims were at a seasonally adjusted level of 229,000. This is unchanged from the previous week's figure and was consistent with the forecast.
Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the April 2025 close.
Explore the performance journey of the S&P 500, Nasdaq, and Dow Jones since their peaks in 2000. This video analyzes how these key U.S. stock market indexes have navigated over two decades of economic shifts and technological change, revealing their distinct paths through April 2025.
Bitcoin's closing price broke above $100,000 this week, hitting its highest level in over three months. BTC is up ~10% year to date and is ~2% below its record high from January 2025.
The Consumer Price Index for Urban Consumers (CPI-U) release for March puts the year-over-year inflation rate at 2.31%. The latest reading keeps inflation below the 3.73% average since the end of the Second World War for a 23rd straight month. Additionally, for a 3rd consecutive month, inflation sits below the 10-year moving average which is at 2.97%.
Gas prices dropped to their lowest level in seven weeks. As of May 12th, the price of regular gas down 3 cents while premium gas was unchanged from the previous week.
Household debt increased by 167 billion (0.93%) in Q1 2025, reaching $18.20 trillion. The overall rise was driven by increases to student loan and mortgage balances.
Inflation affects everything from grocery bills to rent, making the Consumer Price Index (CPI) one of the most closely watched economic indicators. The Bureau of Labor Statistics (BLS) tracks this by categorizing spending into eight categories, each weighted by its relative importance.
The NFIB Small Business Optimism Index dropped for a fourth straight month, falling to 95.8 in April. Notably, the percent of small business owners who reported difficulty filling job openings fell to its lowest level since January 2021.
Inflation cooled for a third straight month in April, hitting its lowest level in over four years. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index was at 2.3% year-over-year, down from 2.4% in March and lower than the expected 2.4% growth.
Seven of the nine indexes on our world watch list have posted gains through May 12, 2025. Hong Kong's Hang Seng is in the top spot with a year to date gain of 20.01%. Germany's DAXK is in second with a year to date gain of 15.71% while France's CAC 40 is in third with a year to date gain of 6.24%.
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
The labor force participation rate (LFPR) is a simple computation: You take the civilian labor force (people aged 16 and over employed or seeking employment) and divide it by the civilian non-institutional population (those 16 and over not in the military and or committed to an institution). As of April, the labor force participation rate is at 62.6%, up from 62.5% the previous month.
Today, one in three of the 65-69 cohort, one in five of the 70-74 cohort, and one in ten of the 75+ cohort are in the labor force.
Our monthly workforce recovery analysis has been updated to include the latest employment report for April. The unemployment rate remained at 4.2%. Additionally, the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 177,000.
The Federal Reserve concluded its third meeting of the year by keeping the federal funds rate (FFR) at 4.25-4.50%, as expected.
This video provides an update on the monthly moving averages we track for the S&P 500 and the Ivy Portfolio after the close of the last business day of the month.
Valid until the market close on May 31, 2025
This article provides an update on the monthly moving averages we track for the S&P 500 and the Ivy Portfolio after the close of the last business day of the month.
Multiple jobholders accounted for 5.4% of civilian employment in April.
April's employment report showed that 82.6% of total employed workers were full-time (35+ hours) and 17.4% of total employed workers were part-time (<35 hours).
Travel on all roads and streets increased in March. The 12-month moving average was up 0.10% month-over-month but was up 0.99% year-over-year. However, if we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.03% MoM and down 0.91% YoY.
The U.S. trade deficit widened to a record high as imports rose more than exports. In March, the trade deficit rose 14.0% to -$140.5B, the fourth monthly increase in the past five months.
What does the ratio of unemployment claims to the civilian labor force tell us about where we are in the business cycle and recession risk?
The S&P 500 real monthly averages of daily closes reached a new all-time high in December 2024 but has retreated from it over the past few months. Let's examine the past to broaden our understanding of the range of historical bull and bear market trends in market performance.
With the Q1 GDP advance estimate and the April close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 207.8%, down slightly from the previous quarter.
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $21,618 for an annualized real return of 15.52%.
The Institute for Supply Management (ISM) released its March Services Purchasing Managers' Index (PMI), with the headline composite index at 51.6—above the forecast of 50.2. This marks the tenth consecutive month of expansion for the index.
The April U.S. Services Purchasing Managers' Index (PMI) from S&P Global came in at 50.8, below the 51.4 forecast. The reading marks the 27th consecutive month of expansion and the slowest growth since November 2023.
The weekly leading economic index (WLEI) is a composite for the U.S economy that draws from over 20 time-series and groups them into the following six broad categories which are then used to construct an equally weighted average. As of April 25th, the index was at 6.038, down 1.531 from the previous week, with 4 of the 6 components in expansion territory.
There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of these indicators: nonfarm employment. In April, total nonfarm payrolls increased by 177,000 while the unemployment rate remained at 4.2%.
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. This analysis focuses on the P/E10 ratio, key indicator of market valuation, and its correlation with inflation and the 10-year Treasury yield.
The moving average for the per-capita light vehicle sales series peaked in August 1978. Almost 50 years later, it is down 35.2% from that peak.
The latest employment report showed that 177,000 jobs were added in April, down from 185,000 in March but higher than the expected 138,000 addition. Meanwhile, the unemployment rate remained at 4.2%, as expected.
Here is a summary of the four market valuation indicators we update on a monthly basis.
The Q Ratio is the total price of the market divided by the replacement cost of all its companies. The latest Q-ratio is at 1.74, down from 1.85 in March. This is the lowest level in fifteen months.
