The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
87 articles
The NFIB Small Business Optimism Index fell to 95.3 in May, below expectations and its long-run average, as owners grew more cautious on hiring and expansion. Inflation concerns intensified, with more firms planning price hikes, a signal that could keep the Fed on hold.
May existing home sales rose to 4.17 million, topping forecasts and marking the fastest pace since December. The rebound came even as 30-year mortgage rates held near 6.48%, signaling resilient buyer demand. Tight inventory and record prices, however, show the housing market remains constrained.
U.S. hiring surprised to the upside in May, with payrolls rising 172,000 and unemployment holding at 4.3%. Job openings also jumped sharply, signaling resilient labor demand even as claims and quits suggest the market is cooling from its hottest pace.
This week’s CPI and PPI reports arrive just before the Fed meeting, putting inflation back at the center of markets. With April’s price pressures still fresh, traders will watch whether consumer and producer costs cool or confirm that inflation is broadening again.
U.S. data showed an economy that remains resilient, but not in a way markets liked. May payrolls beat expectations, services activity accelerated, and prices stayed hot, pushing Treasury yields higher, the dollar up, and stocks lower as Fed rate-cut hopes were delayed.
New home sales and mortgage applications are weakening under elevated borrowing costs, but construction remains resilient and price growth is cooling. The latest data point to a housing market that is slowing in an orderly way, with softer demand and less inflationary pressure rather than a sharp downturn.
The May jobs report showed unemployment holding at 4.3%, U-6 underemployment easing to 8.1%, and payrolls rising 172,000. The solid data reinforced the soft-landing narrative and pushed Treasury yields higher as traders scaled back expectations for near-term Fed cuts.
The Fed’s balance sheet is stabilizing around $6.7 trillion, with a small weekly increase tied to reserve-management purchases rather than classic QE. Treasury holdings are rising while MBS declines continue, signaling a liquidity-focused shift that supports market plumbing without changing the rate outlook.
The average 30-year fixed mortgage rate slipped to 6.48%, offering homebuyers a small affordability boost after a recent run-up. But rates remain stuck in the mid-6% range, keeping housing demand constrained and refinancing activity muted despite signs of steady buyer interest.
Weekly jobless claims climbed to 225,000, the highest since early February, signaling a softer U.S. labor market. But continuing claims fell and the insured unemployment rate held steady, suggesting layoffs remain contained and the economy is cooling rather than cracking.
U.S. factory orders rose 4.8% in April, topping forecasts and extending a run of steady manufacturing demand. Much of the gain came from aircraft, but ex-transportation orders also beat estimates, suggesting underlying strength and giving the Fed another reason to stay patient on rate cuts.
The latest MBA data shows the 30-year mortgage rate easing to 6.57%, yet housing demand barely responded. Total applications fell 2.5% as purchase and refinance activity stayed weak, underscoring how stubborn affordability pressures remain despite a modest drop in borrowing costs.
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