It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
#1—Existing Homes Have Character, But New Homes Have Sales
In June, existing home sales ticked down to an annual rate of 5.08 million. Homebuyers looking for a bargain on a “fixer-uper” are having a tough time this month. June existing home sales missed economists’ expectations (the consensus called for a rate of 5.25 million units). Meanwhile, the supply of existing homes climbed 1.9% to 2.19 million—about a 5.2 month supply at the current sales pace. The median sales price for an existing home also rose to $214,200. While the headline results underperformed expectations, we are still dealing with rising prices and tight inventory. Over the past 12 months, the median sales price has risen 13.5% and existing home sales have jumped 15.2%. The existing homes market now favors sellers, so this has prompted some buyers to opt for purchasing new homes instead.
In June, new home sales jumped 8.3% to an annual rate of 497,000. In addition to outpacing the consensus estimate of 483,000, this represents the highest level in more than five years. The supply of new homes ticked up to 161,000—about a 3.9 month supply at the current sales pace. The median sales price for a new home also climbed to $232,600. This was a strong report. It is encouraging that higher mortgage rates haven’t curtailed demand for new homes. Even so, homebuilders remain cautious, so persistently tight housing inventories should continue to put upward pressure on housing prices.
#2—The Jobless Tug of War
Last week, jobless claims rose 7,000 to an annual rate of 343,000. Economists had expected the measure to rise to 340,000, so these results were slightly worse than expected. At the same time, the four-week moving average declined 1,250 to 345,250. It has been a give up a little ground, gain a little ground environment, but the fact that jobless claims have held steady this long is great news—it indicates that layoff activity is moderating. The four-week moving average is now hovering near a two month low.
#3—A Big Beat From Durable Goods
In June, durable goods orders jumped 4.2%. This was significantly higher than the 2.3% rise forecast by economists. As in previous months, a 31.4% surge in civilian aircraft orders lifted overall transportation orders. Unfilled orders rose 2.1% in June, so an increasing order backlog will likely help to boost durable goods orders in the upcoming months. This represents the third month in a row that durable goods orders have risen—they rose a revised 5.2% in May and 3.6% in April. However, even with this recent strength, most economists still forecast just 1% GDP growth for the second quarter and 2.4% growth for the third quarter.
Have a great weekend,