Economic news can cause major changes in asset prices. But how much a market responds depends on the type of economic information and its timing. For example, small unexpected shifts in some indicators may rock market prices1 over a long period, while shifts in others—however large or surprising—are quickly shrugged off. And while announcements about some economic indicators affect bond yields and exchange rates, other announcements chiefly affect stock prices.
This week’s economic news includes the effect of a weaker dollar on travel budgets, as well as how much it costs to buy homes in various parts of the country. Plus, we examine why more filmmakers are opting to shoot outside Los Angeles and how much a 35% tariff could cost American consumers.
What’s in store for gas prices? Experts anticipate stability through the Independence Day holiday weekend despite continuing Middle East tensions. And Mission Viejo, California approves Costco’s first-ever standalone gas station with 40 pumps replacing a Bed, Bath and Beyond store.
The cost of traveling abroad is a major consideration for many Americans. A weaker dollar makes it more expensive to spend in some countries, even as airfares fall. But the overall picture is complicated by a number of factors, including how much it costs to get around and whether there’s an easy way to save money.
Many people rely on survey data to gauge expectations about future economic conditions, such as inflation and foreign exchange rates. But these methods have several flaws that can reduce their usefulness. One is the lag between the time of the survey and the release of the data. This delay can lead to accumulated information informing the measured news, resulting in a lower-than-expected response to true economic surprises.