The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
171 articles
June housing starts jumped sharply, driven by a surge in multifamily construction, but building permits fell and single-family activity weakened. The mixed report suggests builders are active now but growing cautious about future demand as high mortgage rates and soft sentiment continue to weigh on housing.
The Philadelphia Fed Manufacturing Index jumped to 41.4 in July, far above expectations and its highest reading since November 2021. The blowout print signals a sharp rebound in factory activity, stronger U.S. growth momentum, and less room for the Fed to cut rates soon.
The Fed’s balance sheet rose modestly to $6.743 trillion, driven mainly by Treasury holdings while mortgage-backed securities stayed flat. The move points to routine reserve management under the central bank’s ample-reserves framework, not a new policy shift, as money markets remain calm and rate settings stay unchanged.
The average 30-year fixed mortgage rate climbed to 6.55%, its highest level in nearly a year, adding fresh strain to affordability. With home prices still near records and builder sentiment weak, the latest move deepens pressure on buyers and reinforces a cautious outlook for housing.
U.S. housing data showed fresh weakness as builder sentiment fell and pending home sales dropped far more than expected. High mortgage rates and record home prices are squeezing buyers, while builders lean on price cuts and incentives to keep sales moving in a market still under pressure.
U.S. retail sales rose just 0.2% in June, but the details were sturdier than the headline suggested. Lower gasoline prices weighed on receipts, while the control group climbed 0.5%, pointing to resilient consumer demand and solid second-quarter spending momentum.
Weekly jobless claims dropped to 208,000 and continuing claims eased, signaling that layoffs remain contained even as hiring slows. The data supports a soft-landing view, keeps recession fears subdued, and gives the Federal Reserve little reason to rush into rate cuts.
New York manufacturing kicked off July with a sharp upside surprise as the Empire State index jumped to 15.6, well above forecasts. New orders and shipments strengthened, employment improved, and the report reinforced expectations that the Fed may stay cautious on rate cuts.
The MBA’s latest survey shows the average 30-year fixed mortgage rate rising to 6.65%, the highest since August 2025. Higher borrowing costs pushed total applications down 2.7%, with purchase demand falling 7% as affordability pressures continue to weigh on the housing market.
The Fed’s July Beige Book shows U.S. growth spreading to more districts, with hiring improving and inflation cooling only gradually. But higher fuel, freight, and tariff-linked costs are still squeezing margins, keeping the policy outlook tilted toward a cautious hold.
U.S. producer prices unexpectedly fell in June, marking the biggest monthly drop in 14 months and easing annual inflation to 5.5%. Energy-led goods deflation drove the surprise, while core measures stayed sticky. Markets took the report as Fed-friendly, sending Treasury yields and the dollar lower.
June inflation cooled sharply while retail sales and personal spending stayed positive, easing fears of a demand collapse. Confidence and sentiment remain weak, but the latest data point to a cautious consumer that is still spending enough to support a soft landing.
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