Financial Report

Last week’s scheduled economic reporting included readings on construction spending, public and private sector payroll growth, and the national unemployment rate. Weekly readings on mortgage rates and new jobless claims were also released.

Construction Spending Slips in June

U.S. construction spending slipped by 0.60 percent to 0.50 percent growth in June; analysts expected a month-to-month reading of  0.70 percent growth in construction spending. Year-over-year construction spending increased by 3.50 percent of which single-family residential construction accounted for 2.10 May’s reading for construction spending was revised from  0.90 percent growth to 1.10 percent growth from May to June.

Private residential construction rose by 0.30 percent in June. Spending on public residential construction decreased by -0.20 percent.

July Payroll Growth Shows Mixed Results

ADP reported 324,000 private sector jobs added in July. Analysts predicted only 175,000 private sector jobs added in July while June’s reading showed 455,000 jobs added. The federal government’s Nonfarm Payrolls report showed 187,000 jobs added in July.  Analysts expected 200,000 public and private sector jobs added in July while June’s reading showed 185,000 public and private sector jobs added.

The U.S. national unemployment rate dropped to 3.50 percent in July from June’s reading of 3.60 percent.

Mortgage Rates and Initial Jobless Claims Rise

Freddie Mac reported higher mortgage rates last week as the average rate for 30-year fixed-rate mortgages rose to 6.90 percent. The average rate for 15-year fixed-rate mortgages rose by 14 basis points to 6.25 percent.  The Commerce Department reported that 227,000 jobless claims were filed last week,  which matched expectations and was higher than the 221,000 unemployment claims filed in the previous week.

What’s Ahead

This week’s scheduled economic reporting includes readings on inflation and consumer sentiment. Weekly reports on mortgage rates and jobless claims will also be released.

Last week’s economic reporting included readings on month-to-month and year-over-year inflation and consumer sentiment. Weekly readings on mortgage rates and jobless claims were also published.

Month-to-Month Inflation Rises as Year-Over-Year Inflation Slows

The Consumer Price Index for June rose 0.20 percent in June as compared to May’s reading of 0.10 percent growth and expectations of 0.30 percent month-to-month growth. The core CPI reading, which excludes volatile food and fuel sectors, fell to 0.20 percent growth in June as compared to May’s month-to-month reading of 0.40 percent growth.

The year-over-year reading for the Consumer Price Index in June slowed to 3.00 percent growth as compared to May’s reading of 4.00 percent and analysts’ expected reading of 3.10 percent year-over-year growth.

The year-over-year reading for the Core Consumer Price Index showed 4.80 percent growth; analysts expected year-over-year inflationary growth of 5.00 percent. May’s year-over-year inflation reading showed 5.30 percent growth. Year-over-year readings show overall inflation trends without month-to-month volatility.

Rising interest rates did not appear to impact consumers’ enthusiasm. July’s preliminary index reading of 72.60 for the Consumer Sentiment Index was the highest reading published since September 2021. Analysts expected an index reading of 65.50 as compared to June’s reading of 64.40.

Mortgage Rates Nearing 7 Percent

Average mortgage rates rose last week and approached 7.00 percent for 30-year fixed-rate mortgages according to Freddie Mac’s weekly Primary Mortgage Market Survey.  The average rate for 30-year fixed-rate mortgages rose by 15 basis points to 6.96 percent. The average rate for 15-year fixed-rate mortgages rose six basis points to  6.30 percent. July 13 jobless claims will be published this week.

What’s Ahead

This week’s scheduled economic reporting includes readings on home builder confidence in single-family housing market conditions, and government reporting on housing starts and retail sales. The National Association of Realtors® will release its monthly report on sales of previously-owned homes. Weekly readings on mortgage rates and jobless claims are also expected.