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If you were watching oil prices today, you might need a neck brace. Strikes and counterstrikes in the Middle East set prices flip-flopping; we’ll explain in today’s newsletter. We’ll also look at the latest unemployment numbers, the Pentagon’s big ask, and how Americans are absorbing soaring health care premiums after marketplace subsidies expired. Then we’ll take a tour of the happiest countries on earth. Daniel Ackerman gets us started with the latest on new home sales. —

Carrie Barber, newsletter editor

The front of a cozy looking house is blanketed with untouched snow.

Kena Betancur/Getty Images

A January chill for new home sales

Analysts had predicted a stronger market by now, but wintery weather kept prospective buyers indoors.

Back in December, housing analysts were predicting that by now, the market for homes would be gradually improving after last year's doldrums.

Those forecasts came up short when the Census Bureau reported Thursday that January’s seasonally adjusted sales were down more than 17% compared to December.

Lisa Sturtevant of Bright MLS expected some weakness.

“There was a lot of wintry weather. People aren't usually out touring home sites during that weather,” Sturtevant said. But she didn’t think the numbers would be quite this bad.

“We saw sales at their lowest level since October 2022,” she said.

That has caused some homebuilders, and the lenders they work with, to offer sweeteners like below-market mortgage rates to prospective buyers, said Tiffany Russell, a real estate agent in Austin, Texas.

“I'm seeing that they are building a lot of homes and giving the farm away on incentives,” Russell said.

News you should know

Let’s do the numbers:

Stocks recovered some losses after another turbulent day driven by the war in Iran. The S&P 500 fell 0.3%, the Dow lost 0.4% and the Nasdaq dropped 0.3%.
First-time jobless claims fell more than expected last week to 205,000, with the labor market in a low-hire, low-fire groove. But continuing claims rose by 10,000, meaning more people are struggling to findwork.
Brent crude oil briefly reached $119 a barrel today before closing at $108.65.
A gallon of regular gasoline averaged $3.88 today, up 4 cents from yesterday. My home state happens to be $5.61.

War in iran

President Donald Trump suspended a shipping law called the Jones Act in an attempt to lower gas prices. An expert told us the move might save drivers in coastal states a few cents a gallon at most.
The Trump administration is considering lifting sanctions on Iranian oil already loaded onto vessels after Iran attacked a major Qatari refinery for liquefied gas.
The Pentagon has asked the White House for more than $200 billion to fight the war. If approved, the request will be sent to Congress. But given that’s nearly a quarter of the annual defense budget, it’s likely to face political battles.

Health care

Americans covered under the Affordable Care Act health insurance are planning to cut back on food, clothing and other basics to pay for health care costs, a KFF survey reported today. Premiums spiked after government subsidies expired on Dec. 31.
Millions of Americans decided to drop their ACA coverage altogether, the same report said.

QUOTE OF THE DAY

“What we found is that the China shock didn't just empty factories, it actually quietly weakened the local banks, leading to higher loan rates and less credit for the local community.”

— Jiajie Xu, assistant professor of finance, University of Iowa Tippie College of Business

When China joined the World Trade Organization in 2001, it reshaped parts of the U.S. economy. Research has shown the “China shock” hit manufacturing jobs, wages, and labor force participation in certain regions. Xu worked on a new study from the University of Iowa that suggests the ripple effects didn’t stop there.

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Two older women dance next to a statue of a happy, waving man.

Christopher Furlong/Getty Images

Final note

🇫🇮Finland? Again?

Finland topped the World Happiness Report for the ninth year in a row. Researchers examined income, freedom, inequality, life expectancy and generosity to rank 140 countries. Four other Nordic countries, known for their strong social services networks and quality of life, made the top six, with Costa Rica ranking fourth. The United States came in at 23, up one spot from last year. Most Western industrialized countries are less happy now than they were in 2010, the report said.

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