Daily News 2/26/2015

February 26, 2015

Thursday – February 26

Economic data was plentiful today, beginning with a government report showing that consumer prices fell in January, due in part to the big decline in gas prices. The inflation reading Consumer Price Index (CPI) fell 0.7% last month, just below the -0.6% expected. CPI measures what Americans pay for goods and services. On a year-over-year basis, the CPI fell 0.1%, the first annual decline since October 2009. Tame inflation has kept the Federal Reserve from raising short term interest rates and if this pattern continues, rates could remain low.

Over in housing, the Federal Housing Finance Agency reported that home prices rose by 1.4% in the fourth quarter of 2014. The gain was the 14th consecutive quarterly price increase in the purchase only index. The numbers are generated by gathering information on home sale prices from mortgages sold to Fannie Mae and Freddie Mac. Within the report it showed that prices rose nearly 5% from the fourth quarter of 2013 to the fourth quarter of 2014.

Americans filing for first time unemployment benefits spiked in the latest week to the highest level since January 10. Weekly Initial Jobless Claims rose by 31,000 to 313,000, though claims remain near the 300,000 level, a historically low number. The job market has been picking up steam in the past year as the economy continues to improve. In the months from November to January, employers added more than one million jobs, the best three month pace since 1997. One caveat, hourly earnings or wage growth has been muted in the past five years, though there was a 0.5% increase in January, the most in six years.