Dot Plot Shows Two or Three Rate Cuts in 2024

•                 The FOMC kept the fed funds rate unchanged, in a range of between 5.25% and 5.50%. The FOMC maintained a bias toward rate cuts.

•                 The dot plot is about evenly split between two and three fed funds rate cuts in 2024, with additional cuts in 2025.

Homebuilding Adding to Growth in 2024

• Housing starts increased 10.7% in February from January, with single-family starts up 12%.
• Housing permits rose 1.9% on the month, with increases for both single-family and multifamily.
• Activity generally softened in the West in February, but was up in the other regions.
• PNC expect homebuilding activities to rebound with easing mortgage rates in 2024.

Both Failed to Reverse Much Bigger Declines in January

• Industrial production rose by a scant 0.1% in February, with manufacturing output up by 0.8%, both failing to fully reverse much bigger declines in January.
• Industrial output has been declining for more than a year due to higher interest rates and softening demand.
• Industrial production is set to decline modestly further this year.

Big Increase in PPI

• Retail sales rose 0.6% in February, making up about one-half of January’s decline; January sales were revised lower.
• Sales excluding food and energy rose a solid 0.3%.
• Consumer spending will continue to increase throughout 2024, although at a slower pace than last year.

Continuing Claims Rose by 17K in Early March

• Initial claims for unemployment insurance edged down by 1,000 to 209,000 in the week ending March 9. The four-week moving average also declined by 1,000 to 208,000.
• Continuing claims rose by 17,000 to 1.811 million in the week ending March 2 and the four-week moving average rose by 2,000 to 1.799 million.