10 Things You Need to Know: June 25, 2024
Key data releases this week include: FHFA House Price Index (Tue), consumer confidence (Tue), new home sales (Wed), Q1 GDP revision (Thu), durable goods orders (Thu), pending home sales (Thu), personal income and spending (Fri), PCE Deflator (Fri), and consumer sentiment.
Haver
June 18, 2024
Total retail sales improved 0.1% (2.3% y/y) during May after falling 0.2% in April. A 0.3% May rise had been expected in the Action Economics Forecast Survey. Sales in the retail control group, which excludes autos, building materials, gasoline stations, and food services, rose 0.4% (3.1% y/y) last month following a 0.5% decline in April.
Haver
June 21,2024
Sales of existing homes fell 0.7% (-2.8% y/y) during May to 4.11 million units (SAAR) from 4.14 million during April. Sales remain above the low of 3.85 million in October 2023 but were below the September 2005 high of 7.26 million. The Action Economics Forecast Survey expected sales of 4.10 million units. The median price of all existing homes increased 3.1% (5.8% y/y) to a record $419,300.
Haver
June 21,2024
The U.S. Leading Economic Index (LEI) fell 0.5% m/m in May after drops of 0.6% in April and 0.3% in March, according to a report released today by The Conference Board. A 0.4% m/m May decline had been expected in the Action Economics Forecast Survey. Five of the LEI’s ten indicators in May contributed negatively to the index change.
Reuters, FT
June 20, 2024, June 20,2024
Switzerland lowered its rates again on Thursday, reducing them to 1.25% and leading big central banks in rate cuts. Sweden, Canada, and the European Central Bank have also cut rates recently, though the ECB has indicated it is in no rush to do so again, while the Bank of England decided to hold rates at its meeting Thursday.
Bloomberg
June 14, 2024
Beijing has suggested Germany’s luxury car manufacturers could benefit if Berlin convinces the EU to drop tariffs on Chinese electric-vehicle exports. China floated lowering its existing tariffs on large-engine cars in return for scrapping planned EV levies on imports from the Asian nation. Beijing currently imposes a 15% fee on passenger vehicles from the bloc.
Barron’s
June 24, 2024
The Congressional Budget Office sharply increased its projection of the current year’s red ink, to $2 trillion from $1.6 trillion previously, news that got scant mention in most of the media. The deterioration reflected in the CBO’s new revision means the federal deficit is running at 6.7% of gross domestic product. It projects U.S. debt-to -GDP ratio in fiscal 2027 of 122%.
Barron’s
June 24,2024
Instead of continuing to decline, market measures of rent growth are now once again accelerating. Market rents are likely to move back to their long-term pattern of increasing faster than overall inflation. Since 1980, rents have increased at an average annual real rate of 1%. High interest rates and the Fed’s restrictive policies have decreased rental supply by pushing multifamily asset prices below construction costs.
Bloomberg
June 24, 2024
Federal Reserve Bank of San Francisco President Mary Daly warned the US labor market is nearing an inflection point, where further slowing could mean higher unemployment. “So far, the labor market has adjusted slowly, and the unemployment rate has only edged up. But we are getting nearer to a point where that benign outcome could be less likely,” Daly said.
FT
June 21, 2024
Analysts warn that the US may have to end its quantitative tightening early due to a surge in short-term debt issuance, with the total stock of Treasury bills predicted to exceed $6 trillion. This unprecedented borrowing, driven by aid packages and domestic policies, could disrupt money markets and complicate the Federal Reserve’s efforts to control inflation.