The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
171 articles
NFIB’s Small Business Optimism Index rose to 97.4 in June, topping forecasts and reaching its highest level since February. But inflation remains the top concern for owners, pricing pressure is still elevated, and hiring stays difficult, leaving Main Street cautiously upbeat rather than fully confident.
June inflation cooled more than expected, with headline CPI falling 0.4% month over month and core prices flat. The surprise pushed traders to sharply reduce odds of a near-term Fed hike, lifted bonds, and weakened the dollar as markets priced in less policy pressure.
A packed week of U.S. data will test whether the economy is cooling smoothly or slipping into sticky inflation and softer growth. Retail sales, jobless claims, housing starts, manufacturing and Michigan sentiment could all shape the market’s view of the Fed and the consumer.
Fresh data showed the economy still expanding, but only modestly, while inflation and housing costs kept the Fed cautious. Services activity stayed in growth, jobless claims remained low, and GDP tracking eased to 1.3%, yet mortgage rates, record home prices and hawkish Fed signals reinforced a higher-for-longer outlook.
The Fed’s balance sheet rose modestly to $6.736 trillion, signaling steady reserve management rather than a major policy shift. Treasury and mortgage-backed securities still dominate the portfolio, while calm money markets suggest the latest print is more about liquidity plumbing than stress.
Freddie Mac’s latest data show the average 30-year fixed mortgage rate rising to 6.49%, keeping buyers squeezed and refinancing muted. With Treasury yields edging higher and existing-home sales falling, the housing market remains stuck in a costly, higher-for-longer rate environment.
June existing home sales slipped below forecasts as mortgage rates near 6.5% kept buyers on the sidelines. Even with weaker turnover, the median home price climbed to a record, underscoring how tight supply continues to squeeze affordability across the U.S. housing market.
Initial jobless claims slipped to 215,000, signaling layoffs remain contained, while continuing claims edged higher, underscoring a slower hiring backdrop. The mixed report supports the view that the U.S. labor market is cooling gradually, keeping the Fed on hold for now.
The MBA 30-year mortgage rate ticked to 6.58%, a tiny move that still leaves borrowing costs stuck in the mid-6% range. Refinancing fell again, purchase demand stayed soft, and affordability remains strained as the housing market struggles to regain momentum.
June payroll growth cooled to just 57,000, signaling softer labor demand, but the job market remains intact. Unemployment edged down to 4.2%, layoffs stayed low, and openings were still elevated, pointing to a labor market that is cooling without cracking.
June’s ISM Services PMI stayed in expansion at 54.0, signaling the U.S. economy is still growing even as momentum cooled. New orders and business activity slowed, prices remained sticky, and the employment index rebounded above 50, supporting a soft-landing narrative.
Existing and pending home sales beat expectations, showing buyers are still active, but housing starts and new home sales fell sharply. The split data suggest demand is holding up, yet high mortgage rates and softer construction are keeping the housing recovery uneven.
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