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:
Existing Home Sales Reach 8-Year High
On Wednesday, the National Association of Realtors reported that existing home sales rose 3.2% in June to an annual pace of 5.49 million, which is the fastest annual pace since February 2007. This surpassed economists’ estimates for a 5.40 million pace. In the past 12 months, median home prices have risen 6.5% to $236,400. Growing mortgage demand is starting to put upward pressure on longer-term interest rates, so the yield curve continues to get steeper in the wake of the latest housing boom.
Jobless Claims Hit 42-Year Low
For the week ending July 17, the Labor Department reported that new claims for unemployment declined by 26,000 to 255,000, which is the lowest level since 1973. Economists estimated that the initial filings would fall to 278,000 from 281,000 in the previous week. Meanwhile, the four-week moving average dipped 4,000 to 278,500. This latest record-breaking low means that jobless claims remain below the 300,000 mark for 20th consecutive week, an encouraging sign that the economy is still recovering.
Leading Economic Indicators Rise in June
The Conference Board’s leading economic index increased 0.6% to 123.6 in June, after rising 0.8% in May and 0.6% in April. This widely beat economists’ expectations for a 0.2% increase. A strong reading for housing permits and the interest rate spread led to the latest gain in Leading Economic Index, as the increasingly positive economic outlook for the country continues to gain momentum. However, the Fed is still not likely to raise key interest rates until there is evidence of real wage growth, but that may all change if second quarter GDP growth surprises to the upside and market rates continue to rise.
New Home Sales Drop to 7-Month Low
In June, sales of new homes fell 6.8% to an annual rate of 482,000 units, a seven-month low. This is way below the consensus estimate for a pace of 550,000 units. May new home sales were revised lower to a 517,000 pace, down from the previously reported 546,000. Despite the set-back in new-home purchases in June, overall sales were up 18.1% compared to June 2014. This suggests that the housing market is still gaining momentum.
That’s all I have for you this week; I’ll be in touch again next week with the latest ratings updates out of Portfolio Grader.
Have a great weekend,