Elliot Eisenberg Economic & Policy Blog

Bummed Builders The latest homebuilder sentiment index was super-soft. The overall index slumped to 39( 50 is neutral) same as, ugh, 2 / 07, and two of the three subcomponents worsened, current sales to 43, prospective buyer traffic to 24, and sales expectations over the next six months remained unchanged at 47. Weather wasn’ t to blame, all four regional scores slipped. No wonder S & P 500 homebuilder stocks are down 30 % from their mid-October peak.

Security Statistics Despite Secretary Lutnick’ s recent comments, Social Security is a key source of income for many! Half of

seniors get over half their income from SS, 25 % of recipients get 90 % or more. For those with a bachelor’ s degree, SS provides at least 50 % of income to one-third of recipients, 90 % of income to 13 % of persons. For those with less than HS, the percentages are 70 % and 40 %, respectively.

CEO Concerns After a significant rise in CEO optimism in the months following the November election, CEO confidence fell 20 % in early March compared to January and is now at its lowest level since spring 2020. Making things worse, CEO forecasts for what conditions will be like in 12 months fell 28 % from January and are at their lowest level since 11 / 12. It’ s hard to see this boosting hiring or capital expenditures.

Energy Exports In 1991, US net imports of crude oil and refined petroleum products averaged six million

bbl / day. In 2000, net imports were 10 million bbl / day, and they peaked in 2006 at 12.5 million bbl / day. Then everything reversed. In 2010, imports declined to 10 million bbl / day, by 2015, five million bbl / day, and in 2019 they hit zero. Currently, net exports are 4.5 million bbl / day, an amazing combination of improved efficiency and fracking.

Rate Reflection The Fed left interest rates unchanged at today’ s meeting, but there were tariff-related adjustments. Forecasted 2025 GDP growth slid from 2.1 % to 1.7 %, and 2026 growth from 2 % to 1.8 %. Expected 2025 core inflation rose from 2.5 % to 2.8 %, but hinting that tariff inflation is likely transitory, inflation forecasts for 2026 and 2027 remained unchanged at 2.2 % and 2.0 %, respectively. Two 25bps cuts in 25H2 are plausible. Substantial uncertainty lurks.

Inflation Importance February CPI inflation was a light 0.2 % M-o-M and 2.8 % Y-o- Y, core was also 0.2 % M-o-M but 3.1 % Y-o-Y. All readings were better than last month. Fuel price declines helped, as did slowing rents. And Powell’ s“ super-core” index, which is core minus rents, was a benign 0.2 %. Importantly, this decline in inflation is probably a reflection of softening domestic demand. If it keeps up, tariffs aside, rate cuts will materialize.

Elliot Eisenberg, Ph. D. is an internationally acclaimed economist and public speaker specializing in making economics fun, relevant and educational. Dr. Eisenberg earned a B. A. in economics with first class honors from McGill University in Montreal, as well as a Master and Ph. D. in public administration from Syracuse University. Eisenberg is the Chief Economist for GraphsandLaughs, LLC, a Miami-based economic consultancy that serves a variety of clients across the United States. He writes a syndicated column and authors a daily 70- word commentary on the economy that is available at www. econ70. com.

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