Stocks sold off modestly yesterday led lower by transportation stocks. Investors are focused on the economic data out later this week to get an idea about when the Federal Reserve will raise interest rates.
The price of buying or renting a home continues to rise squeezing consumers which is starting to dampen the housing market. The median price of a house nationally hit $20,600 last month which is 7.5% higher than February of last year. Home affordability whether renting or buying continues to decline especially when incomes are growing at less than 2% per year. The number of first time home buyers in the US is also at a record low.
The recent drop in gas prices has encouraged Americans to get out on the road at record levels. American motorists drove more miles in 2014 than in any year since they starting tracking the data 69 years ago. The average American spends the equivalent of 5 days in their car every year.
The Labor Department reported this morning that the consumer price index rose .2% in February which was in-line with forecasts. That is the first time the CPI number has risen in 4 months as gas prices, and the cost of food and shelter have increased again. The CPI data is being watched closely by investors as it is one of the data points the Federal Reserve uses when setting interest rate policy. Even though the inflation rate rose in February, it is essentially unchanged over the last 12 months.