John’s Finance Corner: Economic Insights and Housing Market Trends
As we navigate through the complexities of the current economic landscape, the week of July 22nd has brought forth a mix of subdued housing market activity and a positive surprise in economic growth. Here’s a breakdown of the key developments:
Inflation Measures and Fed’s Rate Cut Outlook: The Personal Consumption Expenditures (PCE) for June indicated a slight rise in headline inflation by 0.1% from May, with the year-over-year figure dipping from 2.6% to 2.5%. The Core PCE, which excludes food and energy prices and is the Fed’s preferred inflation gauge, saw a monthly increase of 0.2%, maintaining the annual rate at 2.6%—the lowest in three years. These figures reinforce the anticipation of a Federal Reserve rate cut at the upcoming September 18th meeting.
Home Sales Data: Existing Home Sales, as reported by the National Association of REALTORS (NAR), declined for the fourth consecutive month, with June’s transactions down by 5.4% from May and the previous year. This trend likely reflects the impact of higher rates experienced in April and May. Similarly, New Home Sales decreased by 0.6% from May to June, marking the lowest level since November and a 7.4% drop from last June, with the Northeast region experiencing a significant annual decline.
GDP Growth Exceeds Expectations: The Bureau of Economic Analysis’s advance estimate revealed that the U.S. economy grew by an impressive 2.8% in the second quarter, surpassing the 2% estimate and doubling the growth rate of the first quarter.
Unemployment Claims: The latest week saw a decrease in the number of people filing for unemployment benefits, with Initial Claims totaling 235,000. However, 1.851 million individuals continue to receive benefits after their initial claim, indicating that jobless claims remain higher than at the start of the year.
Upcoming Economic Indicators: In the coming week, we’ll be closely monitoring housing appreciation data from Case-Shiller and the Federal Housing Agency, along with June’s Pending Home Sales. The labor sector will also be in focus, with updates on job openings, private payrolls, unemployment claims, and non-farm payrolls. Additionally, the Fed’s two-day meeting will commence, culminating in the Monetary Policy Statement and a press conference that could shed light on future economic policies.
As a Senior Loan Officer, I understand the importance of staying informed about these economic indicators and their implications for the housing market and mortgage rates. It’s crucial for us to provide our clients with the most current insights to make well-informed financial decisions.
Stay tuned for more updates!
John Lamberg
Senior Loan Officer
Mobile 727.366.9947
Website ccm.com/john-lamberg
Email [email protected]
