America’s economic picture in the past week mixed a snapshot of rising retail activity with continued pressure from higher energy prices, shifting public views of President Donald Trump’s handling of the economy, and signals that the job market remained steady even as layoffs loomed for some workers.
The Commerce Department said retail sales increased 1.7% in March after a revised 0.7% gain in February, and it credited the month’s jump largely to a spike in gas prices attributed to the Iran war, which the report said was now in its eighth week. The Commerce Department also said the March increase was the fastest one-month rise in retail sales in more than three years. It noted that the report represented the first read on spending intended to capture effects of the Iran war.
In the same Commerce report, retail sales excluding gas prices rose 0.6% in March, helped in part by government tax refunds and warm weather. Gas-station business rose 15.5%, the Commerce report said, while overall spending still reflected how households allocated more of their money to transportation costs.
The AP-NORC Center for Public Affairs Research found that Trump’s approval on the economy slumped over the past month, a change the polling attributed to inflation pressures from higher prices during the Iran war. The poll said Trump’s economy approval rating dropped to 30% in April from 38% in a March AP-NORC survey. It also found that 32% of U.S. adults approved of Trump’s leadership on Iran, a share the poll said was unchanged from last month.
Separately, mortgage rates offered some easing for buyers in the spring homebuying season. Freddie Mac reported that the average long-term U.S. mortgage rate fell for the third consecutive week, with the benchmark 30-year fixed rate dropping to 6.23% from 6.3% the prior week. Freddie Mac also said the rate averaged 6.81% one year earlier and that the 6.23% reading was the lowest since March 19, when it was 6.22%.
Still, the news also included a job-market read-through that remained within a “historically healthy range.” The Labor Department reported that unemployment benefit applications for the week ending April 18 rose by 6,000 to 214,000 from 208,000 the week before. The report said the figure was slightly more than the 210,000 new applications analysts surveyed by FactSet expected, and it described unemployment claims as a near-real-time proxy for U.S. layoffs.
Markets ended the week mostly mixed as major railroads reported strong starts to the year. The report said CSX profits jumped 25% as it hauled 3% more shipments, and it said Union Pacific profits rose 5%. It also said Norfolk Southern would have topped Wall Street projections, but it missed due to costs that included big insurance payments related to the East Palestine, Ohio, derailment and the planned merger with Union Pacific.
The week’s broader financial mood also turned on expectations for Iran-related outcomes and energy prices. The report said optimism had been building that the United States and Iran could avoid a worst-case scenario for the global economy because of the war launched by the U.S. and Israel. It noted that U.S. crude prices jumped 14% in a shaky cease fire involving Iran that included firing on several ships in the Strait of Hormuz.
The direction of key indicators suggested a continuing tug-of-war between consumer demand and costs driven by war-linked energy prices, with public opinion moving in step with household strain even as mortgage rates eased at the margin.