The economy, inflation and how those forces could impact the lives of Americans were front and center over the past week. Trips to the grocery store or gas station are more painful than they were last year, and that is impacting the decisions of both households and businesses.
Here’s a snapshot of prominent economic data and news that occurred over the past week and what it potentially means for you.
The average long-term U.S. mortgage rate climbed this week to its highest level in nearly nine months, driving up borrowing costs for homebuyers during what’s traditionally the housing market’s busiest time of the year.
The benchmark 30-year fixed rate mortgage rate rose to 6.51% from 6.36% last week, mortgage buyer Freddie Mac said Thursday. Despite the sharp increase, the average rate remains below 6.86%, where it was a year ago.
Rates have been mostly trending higher since the war with Iran began. The closure of the Strait of Hormuz has roiled energy markets, sending crude oil prices sharply higher — a key driver of inflation.
Expectations of higher oil prices and worries about big and growing debts for the U.S. government and others have pushed up long-term bond yields, causing mortgage rates to head higher.
U.S. retailers have spent months navigating an uncertain economic environment, from President Donald Trump’s tariffs to the impact of soaring gasoline prices due to the Iran war. The average price for a gallon of regular gasoline rose again this week, ending at about $4.55 per gallon on Friday, according to AAA. Gasoline prices are about 45% above where they were at this time last year.
Based on quarterly financial reports from Walmart, Target, Home Depot, Lowe’s and TJX, shoppers are cautious but still spending, helped by more generous tax refunds. Yet there is a widespread belief among economists that once those refunds dry up, shoppers will pull back on spending. Consumer spending is the dominant economic engine for the U.S., and retreat would have broad implications for the U.S.
Walmart issued a forecast for the current quarter on Thursday that was weaker than what Wall Street had been expecting. Target raised its annual revenue outlook on Wednesday, saying it expected momentum to continue the rest of the year. Yet the upgraded sales expectations were still below the pace of the first quarter.
Fewer Americans filed for jobless aid last week as layoffs remain low despite a number of uncertainties that continue to cloud the economy.
U.S. applications for unemployment benefits for the week ending May 16 fell by 3,000 to 209,000, the Labor Department reported Thursday. That’s fewer than the 213,000 new applications analysts surveyed by the data firm FactSet had forecast.
Weekly filings for unemployment benefits are considered a proxy for U.S. layoffs and are close to a real-time indicator of the health of the job market.
Despite historically low layoffs, the labor market appears to be stuck in what economists call a “low-hire, low-fire” state. That’s kept the unemployment rate low at 4.3%, but left many of those out of work struggling to find new employment.
The split between Wall Street and most U.S. households grew even wider Friday, as U.S. stocks rose toward the finish of an eighth straight winning week, their longest such streak since 2023. That’s even though a survey showed on the same day that U.S. consumers are feeling worse about the economy.
Shares of Workday and Zoom Communications rose after both delivered better profit reports for the latest quarter than analysts expected.
They’re the latest companies to top analysts’ expectations for profits for the start of 2026. And the cavalcade of such reports has helped U.S. stocks remain near their records. Stock prices tend to follow the path of corporate profits over the long term.
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