When 2025 began, many economists, investors and Wall Street analysts worried about a choppy first half. Their primary focus was the stock market, which ended the year at record levels and looked heavily overbought.
But investors and stock junkies may have overlooked other issues, like stagnant housing markets, pressures on small retail businesses. and rising bankruptcy filings.
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This week the picture will come further into focus to help gauge the economy’s resilience. If the numbers are bullish, stocks might shoot higher.
Sunday futures trading is showing a solid bet that the numbers might be least benign. And perhaps President Donald Trump’s tariff decisions, due April 2, might prove less punitive than thought.
The president’s aggressive posturing against Canada, Mexico and China through February and into March were among the reasons stocks fell back. The Standard & Poor’s 500 Index fell 10% between Feb. 19 and March 13.
Still, higher tariffs will be felt across the country. The biggest impacts will be felt in states with economies tied to exports, especially Texas, California and Louisiana. California, New York, Texas and Illinois are states that see the most import activity.
Here’s what to look for this week:
The big report: PCE
Personal Consumption Expenditures Price Index, due Friday This is the week’s most important report because the Federal Reserve, from Chairman Jerome Powell on down, watches it most closely.
The index is expected to show a 2.5% year-over-year gain. Core PCE (which strips out food and energy) is expected to show a 2.6% gain.
Better-than-expected data on this will cheer investors and the Trump administration.
Related: April hasn’t even started but is already affecting stocks
What else to watch on the economic front
Monday: Standard & Poor’s purchasing managers index reports on manufacturing and services for February. These are estimates of goods and service orders that organizations have put together and thus are indicators of future activity. A reading above 50 signals expansion. Below 50 is a sign of slowing.
In January, the Services index fell below 50 and was at its lowest level in 25 months. Services data matter because the U.S. economy is largely services-oriented. Manufacturing activity was still strong. The current estimates for this week’s reports are for services to rise above 50, The manufacturing PMI was still be above 50 but down slightly from January.
Tuesday: New-home sales and the S&P Case-Shiller Home Price Index for February. The first estimates of sales of new homes by builders. Many have resorted to subsidizing mortgages to get sales through. The Case-Shiller report tracks price trends in 20 markets.
A ‘Sold’ sign in front of a house at the Toll Brothers Preserve at Folsom Ranch community in Folsom, Calif., on March 6, 2025.
Tuesday: Consumer Confidence Index for February from the Conference Board. The index is derived by asking consumers to answers queries about current and future expectations.
This is so-called soft data because it measures attitudes at specific times. (It’s not hard data like the unemployment rate.) But this report and the University of Michigan Consumer Sentiment report say there is a relationship between consumer attitudes and what might happen in the economy. Note: A final Consumer Sentiment report for March is due Friday.
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Wednesday: Durable Goods orders for February. This indicator, due at 8:30 a.m. Eastern Time Wednesday, suggests whether businesses are becoming more confident about the economy. Transportation equipment orders will also be watched closely because they can signal how companies like Boeing (BA) and Ford Motor Co. (F) are faring.
More Economic Analysis:
Retail sales add new complication to Fed rate cut forecastsCPI inflation surprise resets tariff talkDoes Friday’s big rally mean the worst is over?
Thursday: Initial jobless claims. This weekly report from the Labor Department is an early indicator of job-market problems. So far in 2025 the jobless claims rates have been steady at around 220,000. And continuing claims, made by workers laid off for extended periods, are about 1.9 million. For now, the situation is stable.
Thursday: Pending home sales for February. The National Association of Realtors report measures housing contract activity based on signed real estate contracts for existing single-family homes, condos and co-ops.
It is a decent measure of housing demand and whether sales can go through. In January, the report showed sales falling 4.6%. The Los Angeles fires and horrible winter weather in the Midwest and South may have depressed activity.
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