The housing market took center stage this week. The week began with an eye-catching plunge in home builder sentiment. July's NAHB Housing Market Index dropped 12 points to 55, the second largest monthly decline on record behind April 2020's pandemic-induced collapse. There was not a bright spot to be found in the underlying details, with measures of buyer traffic and single-family sales, both present and future, posting substantial declines. For most of the past two years, home builders have been navigating a rising cost environment, namely for building materials, labor and land. However, the straw that breaks the back of builder sentiment now appears to be higher financing costs. According to Freddie Mac, the average 30-year mortgage was 5.54% during the week ended July 21, a jump from the 3.22% averaged during the first week of 2022.
The downturn in home builder confidence provided an early clue that June's data for new home production would surprise to the downside. Total housing starts declined 2.0% to a 1.559 million-unit pace during June, below consensus estimates for a modest increase following May's sharp contraction. Single-family starts dropped 8.1%, the fourth consecutive monthly decline. Single-family starts are now running at a 982,000-unit pace, which is a bit higher than the sluggish pace registered for much of the decade predating the pandemic, but still the slowest since June 2020. The sharp rise in borrowing costs is clearly leading home builders to scale back production plans, with single-family permits recently taking a downward trajectory. Single-family permits dropped 8% in June, the fourth consecutive drop.
This Week's State Of The Economy - What Is Ahead? - 06 November 2020
Wells Fargo Economics & Financial Report / Nov 10, 2020
As of this writing, the outcome of the U.S. presidential election is undecided. Joe Biden, however, appears likely to become president based off of his growing lead in several key states.
This Week's State Of The Economy - What Is Ahead? - 24 March 2023
Wells Fargo Economics & Financial Report / Mar 29, 2023
The FOMC hiked the federal funds rate by 25 bps on Wednesday amid continued strength in the labor market and elevated inflation.
This Week's State Of The Economy - What Is Ahead? - 16 August 2019
Wells Fargo Economics & Financial Report / Aug 17, 2019
Markets gyrated this week as the spread between the ten- and two-year Treasury\'s turned negative for the first time since 2007. Financial markets seem to expect that the sharp slowdown in growth overseas will soon spread to the United States.
This Week's State Of The Economy - What Is Ahead? - 06 December 2019
Wells Fargo Economics & Financial Report / Dec 07, 2019
The latest hiring data are an encouraging sign that the U.S. economy is withstanding the global slowdown and continued trade-related uncertainty.
This Week's State Of The Economy - What Is Ahead? - 05 February 2021
Wells Fargo Economics & Financial Report / Feb 10, 2021
Nonfarm employment rebounded in January, with employers adding 49,000 jobs following the prior month\'s 227,000-job drop.
This Week's State Of The Economy - What Is Ahead? - 20 November 2020
Wells Fargo Economics & Financial Report / Nov 24, 2020
The international economic news over the past week has been somewhat mixed. On the positive side, China’s October data showed ongoing growth in manufacturing and firming retail and service sector activity.
This Week's State Of The Economy - What Is Ahead? - 05 August 2022
Wells Fargo Economics & Financial Report / Aug 08, 2022
The Bureau of Labor Statistics reported this morning that nonfarm payrolls increased 528,000 for the month of July, easily topping estimates, lowering the unemployment rate to 3.5%.
This Week's State Of The Economy - What Is Ahead? - 24 September 2021
Wells Fargo Economics & Financial Report / Oct 10, 2021
While fears of an Evergrande default in China were rattling financial markets, for those of us in Southeast Texas who have survived the typically very hot months of July, August and September, this week brought the very welcome first early fall-like
How Long Can US Businesses Remain Shut Down?
Wells Fargo Economics & Financial Report / Apr 29, 2020
The sudden stop in economic activity caused by the COVID-19 pandemic means that many businesses will need to rely on their cash reserves to survive the next few months.
This Week's State Of The Economy - What Is Ahead? - 26August 2022
Wells Fargo Economics & Financial Report / Aug 29, 2022
I can understand how the opportunity to participate in lots of scintillating economic policy discussions could make fishing look exciting in comparison.
