The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
July’s 4.1% unemployment rate gave Wall Street a lift, but the details were softer: the labor force shrank, payrolls fell and underemployment stayed elevated. Markets rallied on lower Fed pressure, yet the report points to a cooling labor market rather than broad strength.
The Federal Reserve’s assets rose to $6.749 trillion, signaling that aggressive quantitative tightening has given way to reserve management. Treasury bill purchases and ample reserves are supporting liquidity, but the move is too small to change the policy-rate outlook or meaningfully ease borrowing costs.
Mortgage rates are tightening the housing market again as Freddie Mac’s 30-year average rises to 6.69%, its fifth straight weekly gain. The 15-year rate eased slightly, but affordability remains strained, with buyers still facing higher borrowing costs and weak homebuying sentiment.
Initial jobless claims came in below forecasts, signaling layoffs remain contained, but continuing claims rose above estimates, showing workers are taking longer to find new jobs. The mixed report points to gradual labor-market cooling and supports a patient Federal Reserve stance.
The MBA 30-year mortgage rate climbed to 6.81%, its highest level in a year, while total mortgage applications fell 2.9%. The move underscores how even a small rate increase can further strain affordability and cool housing demand as bond yields stay elevated.
U.S. services activity stayed in expansion territory in July, with new orders and business activity strengthening. But hiring slipped back into contraction and prices paid jumped sharply, underscoring a resilient economy that still faces stubborn inflation pressure and a cautious Fed outlook.
Private payroll growth cooled sharply in July, with ADP reporting just 44,000 jobs versus 70,000 expected. The weaker reading points to fading hiring momentum, easing pressure on the Federal Reserve, even as inflation remains above comfort levels and the labor market still shows expansion.
June housing data show a split market: construction jumped and new-home sales improved, but existing-home sales, mortgage applications and contracts weakened. Prices stayed firm and mortgage rates climbed, underscoring an affordability squeeze that is keeping the U.S. housing market stable but stuck without momentum.
U.S. factory orders slipped in June, missing forecasts and signaling softer manufacturing momentum beyond transportation. Still, strong core capital-goods demand tied to AI investment helped offset the weakness, while the ISM index stayed in expansion territory and kept recession fears in check.
June JOLTS showed U.S. job openings slipping to 7.359 million and hires easing, signaling a slower labor market without recession-level stress. Layoffs stayed steady, giving the Fed a softer labor read but not a clear reason to cut rates immediately.
US factory activity rebounded sharply in July, with the ISM Manufacturing PMI rising to 55.6, its strongest reading since May 2022. New orders and employment improved, but prices stayed elevated above 70, keeping inflation pressure and Fed hawkishness in focus.
July’s ISM Manufacturing PMI surged to 55.6, signaling a clear re-acceleration in factory activity. New orders and employment both moved back into expansion, but elevated input prices and only modest industrial production gains keep the outlook constructive yet inflation-sensitive.
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