Week in Review: June 27-July 1
Nothing like a full week of economic data to get us ready for Independence Day. Let’s do this, party people.
Orders for durable goods increased by $1.9 billion (0.7%) in May and have now increased during seven of the past eight months. The consensus forecast was that durable goods orders would be flat for the month, so this is a pleasant surprise. Glass half full, consumer demand remains robust despite rising rates and truly dour consumer sentiment. Glass half empty, demand needs to turn over if inflation is going to come back to earth.
Pending Home Sales
Pending home sales moved 0.7% higher in May and that was the first monthly increase since October 2021. Pending sales are down 13.6% since May 2021. A short-lived lull in the ascendancy of mortgage rates takes much of the credit (pun intended). Given the likely direction of short- and long-term interest rates and the overall economy, it may be some time before pending home sales rebound in a meaningful way.
S&P Corelogic Case-Shiller Home Price Index
This release pertains to April and indicated that house prices once again soared, up 20.4% from April 2021. That’s actually a little less than the year-over-year increase seen in March (20.6%). Because this indicator pertains to April, it’s not particularly useful. We expect home prices to give back some gains during the year ahead.
Federal Housing Finance Agency Home Price Index
This release also pertains to April and tells the same story as the home price index above—home prices increased 18.8% from April 2021 to April 2022. Nothing new to see here. Move along, people!
Conference Board Consumer Confidence Index®
This index fell to its lowest level since February 2021. The component pertaining to consumers’ short-term outlook plummeted to its lowest level since March 2013. Consumers feel a lot better about the present situation than they do about the future. With the exception of early 2020, that’s consistently been the case since 2015. So some of these sub-indicators are not that useful. After all, we had some really good economic times after 2015. What’s more, consumer spending remains reasonably strong, though retail sales dipped in May.
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