Economic pressures and rising costs dominated headlines this past week, with Americans feeling the pinch at grocery stores and gas pumps more acutely than a year ago. These financial strains are influencing decisions made by both families and companies nationwide.
Here’s an overview of significant economic developments from the past week and their potential impact on consumers.
Borrowing costs for potential homebuyers reached their peak in almost nine months this week, as the average long-term U.S. mortgage rate increased during what is typically the housing market’s most active season.
The standard 30-year fixed mortgage rate increased to 6.51% from the previous week’s 6.36%, according to Thursday’s report from mortgage buyer Freddie Mac. While this represents a significant jump, the current average still falls short of the 6.86% rate from one year ago.
Mortgage rates have generally moved upward since the conflict with Iran commenced. Energy markets have been disrupted by the Strait of Hormuz closure, which has caused crude oil prices to surge dramatically — becoming a major factor driving inflation.
Anticipation of elevated oil costs and concerns about mounting debt burdens for the U.S. government and other entities have driven long-term bond yields upward, pushing mortgage rates higher.
American retailers have been managing an unpredictable economic landscape for months, dealing with everything from President Donald Trump’s tariffs to the effects of skyrocketing fuel costs related to the Iran conflict. According to AAA, the average cost of regular gasoline increased once more this week, reaching approximately $4.55 per gallon by Friday. Current gas prices stand roughly 45% higher than they were during the same period last year.
Financial reports from major retailers including Walmart, Target, Home Depot, Lowe’s and TJX reveal that consumers remain cautious yet continue purchasing, supported by more substantial tax refunds. However, economists widely believe that spending will decline once these refunds are exhausted. Since consumer spending drives the U.S. economy, any reduction would have far-reaching consequences.
On Thursday, Walmart released projections for the current quarter that fell short of Wall Street’s expectations. Target increased its annual revenue projections on Wednesday, indicating expected continued momentum throughout the year. However, even these improved sales forecasts remained below first-quarter performance levels.
Applications for unemployment benefits decreased last week as job cuts stay minimal despite various uncertainties affecting the economy.
U.S. unemployment benefit applications for the week ending May 16 dropped by 3,000 to 209,000, according to Thursday’s Labor Department report. This figure came in lower than the 213,000 new applications predicted by analysts surveyed by data firm FactSet.
Weekly unemployment benefit filings serve as an indicator of U.S. layoffs and provide near real-time insight into job market conditions.
While layoffs remain historically low, economists describe the current labor market as being in a “low-hire, low-fire” phase. This situation has maintained the unemployment rate at a low 4.3%, but has made it difficult for jobless individuals to secure new positions.
The gap between Wall Street performance and typical American household experiences widened further on Friday, as U.S. stocks climbed toward completing their eighth consecutive winning week — the longest such run since 2023. This occurred despite a survey revealing that U.S. consumers feel more pessimistic about economic conditions.
Stock prices for Workday and Zoom Communications increased after both companies reported quarterly profits that exceeded analyst predictions.
These companies join a growing list that have surpassed profit expectations for early 2026. This series of positive earnings reports has helped keep U.S. stocks close to record levels. Over time, stock valuations typically align with corporate profit trends.
