Week in Review: June 20-24
After last week’s frenzy of data, this was a slow week. We needed that.
Juneteenth, the newest federal holiday, commemorates the emancipation of slaves in the U.S. and marks the announcement of the end of slavery in Texas by general Gordon Granger of the union army. This is a worthy federal holiday and brings the total of U.S. federal holidays to 11, at least in non-inauguration years.
The first link under the “Links of the Week” section below is about a study that shows holidays (the kind that most people have off work) create more utility than paid time off. This checks out, especially for the two writers of this newsletter. Even if Sage Policy Group closed for a day, we (that is, Anirban and Zack) would almost certainly still end up working if all our clients were still open for business (the rest of our staff might not, however). As Zack points out, the increasingly popular idea of 4-day work week is only appealing if everyone can agree on what 4 days we’ll be working.
Existing Home Sales
Existing home sales dipped 3.4% in May and have now declined for four consecutive months. Sales are down 8.6% year over year while median sales price topped $400,000 for the first time ever. Chalk this one up to the steep increase in mortgage rates combined with still desperate pursuers of homeownership. If you’re looking for a real silver lining (at least from a buyer’s perspective), the inventory of unsold existing homes rose in May. A significant increase in inventory would put downward pressure on prices, and that’s what we expect to unfold during the months ahead.
Chicago Fed National Activity Index
This overly intricate indicator fell to +0.01 in May. Any reading above 0 indicates above average economic growth. Average growth, which is lower than the level that causes inflation, would be a welcome development, but don’t put too much weight on this index. It’s a weighted average of 85 different indicators and nobody has time to understand how this thing actually works.
Jerome Powell Testimony
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