Key facts
- US gas prices averaged $3.999 per gallon on Thursday, the first time below $4 since March.
- Retail sales increased by 0.9% in May, following a revised 0.4% gain in April.
- The Federal Reserve maintained its key interest rate, with nearly half of policymakers open to a hike later this year.
- The average 30-year fixed-rate mortgage fell to 6.47% from 6.52%.
- Initial jobless claims decreased by 4,000 to 226,000 in the week ending June 13.
US gas prices have fallen below $4 a gallon on average for the first time since March, a development attributed to President Donald Trump's agreement with Iran to dilute its uranium stockpile and waive sanctions. The national average price for a regular gallon of gas is now $3.999, according to AAA, following a 15% drop in U.S. crude oil prices this month. However, significant price variations persist across the country, with California averaging $5.64 and South Carolina at $3.58.
In consumer spending news, retail sales saw a better-than-expected 0.9% increase in May, up from a revised 0.4% gain in April. This rise was partly supported by government tax refunds, though economists note this cushion is diminishing. Excluding gas stations, retail sales grew by 0.7%. Sales in the restaurant sector, the only services category detailed, declined by 0.1%.
The Federal Reserve announced it would keep its key interest rate unchanged, a decision influenced by new Chair Kelvin Walsh's approach to economic commentary. This move, which deviates from previous indications of a potential rate cut, suggests ongoing concerns about persistent inflation among Fed officials. Despite holding rates steady, nearly half of the central bank's policymakers indicated they could support a rate hike later this year.
Reflecting broader economic trends, the average rate for a 30-year fixed-rate mortgage decreased to 6.47% from 6.52% the previous week, tracking lower Treasury yields. The number of Americans filing for unemployment benefits also declined modestly, falling by 4,000 to 226,000 in the week ending June 13, remaining at historically low levels. Wall Street stocks experienced a volatile but ultimately positive week, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closing higher.