This past week was another consequential as a number of important reports were released. Taken together, they show an economy that is still relatively strong despite inflation taking a turn for the worse. Let’s look at what the data says about the economy, how it impacts monetary policy and how it might impact your wallet going forward.

On Tuesday, CPI data for the month of April was released. Core CPI was up 0.4 percent over the past month compared to an expected increase of 0.3 percent. Overall CPI was up 0.6 percent, which was in line with expectations. On an annualized basis, inflation was 3.8 percent in April, compared to 3.3 percent a month ago. The increase in oil prices is largely to blame for the acceleration with Americans paying an average of $4.52 for a gallon of gas.

On Wednesday, the Price Producer Index (PPI) for April was released. It revealed that core PPI was up about 1 percent compared to an expected increase of 0.3 percent. Overall PPI was up 1.4 percent compared to an expected increase of 0.5 percent. March figures were revised upward to 0.2 percent and 0.7 percent respectively. It’s possible that price increases for April may have been understated and that consumers may face more pressure on their wallets moving forward.

Also on Wednesday, Fed Chair Kevin Warsh was officially voted in as the new leader of the Federal Reserve. He replaces Jerome Powell who served in that role since 2017. Powell will remain with the Fed, which is the first time in roughly 75 years that a Fed Chair has remained with the organization upon stepping down from the position.

Thursday, retail sale and unemployment data were made public. Core retail sales were up 0.7 percent while overall retail sales were up 0.5 percent. Each of these figures were in line with analyst expectations prior to their release. There were 211,000 claims for unemployment benefits over the last seven days compared to an expected 205,000 and 199,000 confirmed claims from a week ago.

The S&P 500 eked out a slight gain this week finishing up 2.31 points to close at 7,408. This was a gain of just .03 percent for an index that has now finished in the green for seven straight weeks. The index made its high of the week on Thursday when it hit 7513. On Tuesday, it hit a low of 7,344.

The Dow was down slightly this week closing off .01 percent to finish the week at 49,526. The index spent some time above the 50,000 level, which has been both politically and physiologically significant for multiple months now. On Thursday, the market made a high of 50,174 before reversing. On Tuesday, the market bottomed out at 49,394.

As with the other two indexes, the Nasdaq was little changed this week. However, it was still the winner of the week finishing a robust .09 percent higher to close at 26,225. It made a high of 26,689 on Thursday after reversing from the weekly low of 25,810 made on Tuesday.

The price of West Texas Intermediate (WTI) oil came close to $105 this week, which puts it just a few dollars from its yearly high of just over $110. The key level to watch is $100 a barrel as that equates to gas prices of about $4 a gallon.

Next week is going to be another interesting one as there is sure to be continued fallout from events in Iran. There will be some intriguing data points coming out next week such as home sale data as well as the revised consumer sentiment report from the University of Michigan. However, the truly consequential information comes out on Wednesday as the FOMC releases the minutes from the April meeting.

The first full trading week in May was another consequential one with several key reports being released.
On Tuesday, the ISM Services report and the JOLTS jobs reports were released. The ISM Services report came in at 53.6, which was just a shade below the projected 53.7 prior to the release. Meanwhile, the JOLTS report was also close to matching analyst expectations as it revealed that there were 6.87 million openings in the United States compared to an expected 6.86 million.

On Wednesday, the ADP’s version of the nonfarm payroll report came out. It found the economy added 109,000 jobs in April, which was lower than the expected 118,000. However, it was higher than the March reading of 61,000.

Thursday saw the reveal of the unemployment claims data for the past seven days. During that time, there were 200,000 requests for benefits, which was about 10,000 higher than last week. Of course, that reading was one of the lowest since the 1960s, so it’s not surprising that there would be an uptick.

On Friday, the BLS sent out its version of the nonfarm payroll report. In April, the economy added 115,000 compared to an expected 65,000. In addition, the March figure was revised upward to 185,000 from 165,000. The unemployment rate remained steady at 4.3 percent while average hourly earnings were up .2 percent on a monthly basis compared to an expected increase of .3 percent.

The consumer sentiment report from the University of Michigan also came out Friday and found that sentiment was the lowest on record. In April, sentiment dropped to 48.2 percent compared to an expected 49.7. Inflation expectations came in at 4.5 percent, which means that respondents think the inflation rate will be 4.5 percent in 12 months.

The S&P 500 had another winning week finishing up 2.4 percent to close at 7.398 at the end of day Friday. On Monday afternoon, the market made a weekly low of 7,182 before reversing and gaining ground for the remaining four days. It would make a high of 7,399 on Friday afternoon before easing ever so slightly into the close.

The Dow was also up this week, gaining 254 points to close at 49,606 on Friday. This was an increase of 0.5 percent for the index that is up more than 6 percent since the first week of April. Over the last five days, the market made a low of 48,941 on Monday morning and a high of 50,051 on Thursday morning.

Finally, the Nasdaq was up more than 4.5 percent this week to close at 26,247. This was an increase of 1,134 points for an index that is up over 4,000 points during the mini-rally that has existed since the beginning of April. Over the last five days, the market made a low of 24,946 on Monday morning before reversing and closing at its high of the week.

In international news, Australia announced on Monday that it would raise its key interest rate to 4.35 percent from 4.1 percent. American investors should take this seriously as some within the Fed believe that there is room for an interest rate hike in the near future. Canada on Friday announced that its economy lost 17,700 jobs compared to an expected gain of about 12,000.

Next week will be another interesting one as inflation data is set to be released on Tuesday. There will also be a vote to confirm Kevin Warsh as the new leader of the Fed where he is expected to be confirmed without issue. Furthermore, the PPI reports for April are set to be released on Wednesday while retail sales data will come out on Thursday.