The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
171 articles
US data painted a split picture: initial jobless claims fell to 187,000, the lowest since 1969, while the July PMI showed stronger growth and hotter price pressures. Rising Treasury and mortgage rates tightened conditions, keeping the market focused on a soft landing with a stubborn inflation problem.
U.S. business activity accelerated more than expected in July, with S&P Global’s composite PMI rising to an eight-month high. Services led the gain, but manufacturing cooled and inflation pressures intensified, reinforcing a hawkish Fed outlook and keeping rate-cut hopes in check.
June U.S. housing data showed a mixed picture: new home sales rose above expectations, but building permits fell and affordability stayed tight. With mortgage rates at 6.58%, inventory elevated and prices easing, the market is relying on discounts and incentives rather than a true demand surge.
The Kansas Fed manufacturing index came in well above expectations in July, signaling continued expansion in the Tenth District. But the details were less upbeat: hiring slowed sharply, new orders cooled and price pressures stayed elevated, reinforcing a cautious outlook for the Fed and the broader economy.
The Fed’s total assets rose to $6.747 trillion, reinforcing that runoff is still paused and liquidity remains abundant. Reserves climbed to about $3.1 trillion while ON RRP usage stayed near zero, signaling calm funding conditions even as inflation and labor data continue to drive rate expectations.
Freddie Mac says the average 30-year fixed mortgage rate rose to 6.58%, its third straight weekly increase, as higher Treasury yields push borrowing costs up again. The move tightens affordability, pressures builders and buyers, and reinforces a higher-for-longer Fed backdrop.
Weekly U.S. jobless claims fell to 187,000, the lowest level since 1969, signaling layoffs remain scarce even as hiring slows. The report eases recession worries but strengthens the case for higher-for-longer Fed policy, pressuring stocks and lifting Treasury yields.
The MBA’s 30-year mortgage rate climbed to 6.69%, its highest level in 11 months, keeping affordability under pressure. Even so, mortgage applications rose 1.9% as purchase demand held up, while refinancing weakened and more borrowers turned to adjustable-rate loans.
This week’s data will test whether the U.S. economy is still holding up or starting to bend. Mortgage rates remain in the mid-6% range, jobless claims are still low, and business activity is expanding, but firmer price pressure and tight housing conditions could keep markets on edge.
Fresh data showed the economy still expanding, with retail sales, jobless claims and factory activity beating expectations. But housing remained under pressure as mortgage rates climbed, pending sales slumped and builder sentiment softened, keeping the Fed’s rate-hike threat in play.
June industrial production barely rose, but the bigger story was a powerful second quarter for U.S. factories. AI-linked semiconductor, communications, and computer output helped drive the fastest manufacturing pace in five years, while low capacity utilization suggests little near-term inflation pressure from bottlenecks.
U.S. consumer sentiment rose to its highest level since February in July, while year-ahead inflation expectations eased to 4.2%. The rebound was broad-based and helped by lower gas prices, but sentiment remains historically weak and still points to cautious spending rather than renewed confidence.
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