Pending Home Sales rose 4.8% from May to June per the National Association of REALTORS® (NAR), coming in well above estimates of a 1% rise. Sales were 2.6% lower than they were a year earlier, though this is an improvement from May’s -6.6% year-over-year comparison. This report measures signed contracts on existing homes, making it an important forward-looking indicator for closings on these homes as measured in the Existing Home Sales report.

What’s the bottom line? The Pending Home Sales index reversed course after declining in April and May, with NAR’s Chief Economist, Lawrence Yun, explaining, “The rise in housing inventory is beginning to lead to more contract signings. Multiple offers are less intense, and buyers are in a more favorable position.”

The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.3% from April to May after seasonal adjustment, breaking the previous month’s all-time high. Home values in May were also 5.9% higher than a year earlier, following a 6.4% gain in April.

The Federal Housing Finance Agency’s (FHFA) House Price Index also reported that home prices were unchanged from April to May, with prices 5.7% higher than the previous year. Note that FHFA does not include cash buyers or jumbo loans, and these factors account for some of the differences in the two reports.

What’s the bottom line? National home values continue to set new all-time highs, and housing still proves to be one of the best investments and vehicles for wealth creation. S&P DJI’s Head of Commodities, Brian D. Luke, confirmed, “The waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward.” Luke added that Case-Shiller’s home price index “has appreciated 4.1% year-to-date, the fastest start in two years.”

The latest Job Openings and Labor Turnover Survey (JOLTS) showed that job openings fell slightly to 8.184 million in June, well below the high of 12 million hit in 2022. The hiring rate fell to 3.4%, which is the lowest level in ten years not including COVID, while the quit rate remained a low 2.1%. A low quit rate suggests there is less poaching from other companies and fewer people feel confident about finding new employment.

In addition, the latest week’s reporting showed that the number of unemployment claims that were filed rose to the highest levels of the year. First-time filers as measured by Initial Claims totaled 249,000, while 1.877 million people are continuing to receive benefits after filing their initial claim.

What’s the bottom line? We continue to see more weakness in the labor market, with less hiring, fewer people quitting their jobs, and rising unemployment claims. The Fed will be closely watching upcoming labor sector reports as they weigh monetary policy and the timing for rate cuts this year, given their dual mandate of price stability and maximum employment.

Job creation among private employers slowed for the fourth straight month, per ADP’s Employment Report, which showed employers added 122,000 new jobs in July versus the 150,000 that had been forecasted. Large gains in trade and transportation, construction, and leisure and hospitality were offset by losses seen in the information and professional and business services sectors.

Small businesses also continue to struggle, as those with fewer than 50 employees lost 7,000 jobs. This is compared to 132,000 new jobs added among medium and large companies combined.

What’s the bottom line? Job growth is clearly slowing, while annual pay gains also decelerated for both job-stayers (+4.8% from +4.9%) and job changers (+7.2% from +7.7%). The Fed is watching this closely, as it can help alleviate wage-pressured inflation. Nela Richardson, Chief Economist, ADP, noted, “With wage growth abating, the labor market is playing along with the Federal Reserve’s effort to slow inflation. If inflation goes back up, it won’t be because of labor.”

The Bureau of Labor Statistics (BLS) reported that there were 114,000 jobs created in July, which was well below estimates of 175,000. Negative revisions to May and June shaved 29,000 jobs from those months combined. The unemployment rate rose from 4.1% to 4.3%, which is the highest level since October 2021.

What’s the bottom line? There were signs of labor sector weakness throughout this report. Not only was the headline job number (which comes from the report’s Business Survey) well below estimates, the report’s Household Survey showed an even lower number of job gains, at just 67,000. This latter figure is considered more real-time because it’s derived by calling households, whereas the Business Survey is based on modeling and estimations.

In addition, the number of people employed part-time for economic reasons rose by 346,000 to 4.6 million in July. These are people who would have preferred full-time employment but were working part-time because their hours had been reduced or they were unable to find full-time jobs. The number of people who could only find part-time work rose by 51,000.

Regarding wages, average hourly earnings were below estimates while average weekly earnings declined.

After eleven rate hikes since March 2022, the Fed once again left their benchmark Federal Funds Rate unchanged at a range of 5.25% to 5.5%. This decision was unanimous and marks the eighth straight meeting they held rates steady.

The Fed Funds Rate is the interest rate for overnight borrowing for banks and it is not the same as mortgage rates. The Fed has been aggressively hiking the Fed Funds Rate throughout this cycle to try to slow the economy and curb the runaway inflation that became rampant over the last few years.

What’s the bottom line? Cooling consumer inflation combined with signs that the economy and job market are slowing have led to growing calls for the Fed to begin cutting their benchmark Fed Funds Rate. While Fed Chair Jerome Powell did not commit to a rate cut at their next meeting on September 17-18, he said the Fed thinks that the time is “approaching and if we do get the data that we hope we get, then a reduction in our policy rate could be on the table at the September meeting.”

It’s a jam-packed week. In housing news, look for appreciation data for May from Case-Shiller and the Federal Housing Finance Agency on Tuesday. June’s Pending Home Sales will be reported on Wednesday. Labor sector data will also make headlines, with updates on job openings Tuesday, private payrolls Wednesday, unemployment claims Thursday, and nonfarm payrolls and the unemployment rate Friday. Plus, the Fed’s two-day meeting begins Tuesday, with their Monetary Policy Statement and press conference coming Wednesday afternoon.

August 2 is National Ice Cream Sandwich Day! Cool off with this classic recipe from The New York Times that makes for a delicious summertime treat!

Preheat oven to 350 degrees Fahrenheit. Butter a 13-x-18-inch baking sheet and line it with parchment paper.

In a medium bowl, whisk together 1 cup all-purpose flour, 3/4 cup cocoa powder, 3/4 teaspoon baking powder and 3/4 teaspoon salt. In a large bowl, whisk together 1 1/2 sticks butter and 1 cup sugar until creamy. Add 2 eggs, one at a time, and beat until smooth. Beat in 2 teaspoons pure vanilla extract. Add the flour mixture and beat until combined.

Scrape batter into the pan and use a spatula to smooth into a thin, even layer, leaving a small border of parchment paper around the edges. Bake until cake is set, about 10 to 12 minutes. Transfer pan to a rack to cool completely.

Transfer cake to a cutting board and cut in half so you have two 9-by-13-inch pieces. Scoop 1 quart of vanilla ice cream on top of one half of the cake and smooth into an even layer. Place the remaining piece of cake on top of the ice cream to make one large sandwich. Wrap well in plastic wrap and freeze until firm, about 8 hours.

Remove from freezer, take off plastic wrap, cut into 12 smaller sandwiches and enjoy.

The number of people filing for unemployment benefits fell in the latest week, though jobless claims remain elevated when compared to the beginning of this year. First-time filers as measured by Initial Claims totaled 235,000, while 1.851 million people are continuing to receive benefits after filing their initial claim.

What’s the bottom line? Both Initial and Continuing Claims have trended higher throughout June and July, with Continuing Claims topping 1.8 million for the past seven weeks. This shows that the pace of layoffs over the last two months has picked up at the same time employers have slowed down hiring.

The advance estimate of Gross Domestic Product (GDP) for the second quarter showed that the U.S. economy grew by 2.8% per the Bureau of Economic Analysis. This was well above the 2% estimate and double the 1.4% growth seen in the first quarter of this year.

What’s the bottom line? Economic activity was better than expected last quarter due in part to strong consumer spending as well as inventory build. Note that this data could  be revised when the second and final readings are released on August 29 and September 26, respectively.

New Home Sales, which measure signed contracts on new homes, fell 0.6% from May to June, marking the second straight monthly decline and the lowest level since November. Signed contracts were also 7.4% lower than they were in June of last year, with the Northeast seeing a nearly 64% annual decline.

What’s the bottom line? Despite the pullback in sales, buyers are still turning to the new construction market, given the ongoing shortage of existing homes for sale. However, more “available” supply (i.e. completed homes ready for buyers to move into) is needed to meet buyer demand. Of the 476,000 new homes available for sale at the end of June, only 102,000 were completed, with the rest either under construction or not even started yet.

Existing Home Sales fell for the fourth straight month per the National Association of REALTORS® (NAR), as June’s transactions were down 5.4% from May and also 5.4% from a year ago. This report measures closings on existing homes in June and likely reflects people shopping for homes in April and May when rates were above 7%.

What’s the bottom line? While the number of closings declined in June, some of the internals within the report point to demand remaining even in the face of elevated rates. Homes remained on the market for a shorter period than in recent months, an average of 22 days in June, down from 24 days in May, 26 days in April and 33 days in March. Plus, almost one in three homes (29%) sold above list price.

Regarding inventory, there were 1.32 million homes available for sale at the end of June, up 3.1% from May and 23.4% from a year earlier. While this remains below healthy levels, rising inventory is certainly a step in the right direction to help improve the persistent tight housing supply we’ve seen across much of the country.

June’s Personal Consumption Expenditures (PCE) showed that headline inflation rose 0.1% from May, while the year-over-year reading declined from 2.6% to 2.5%. Core PCE, the Fed’s preferred method which strips out volatile food and energy prices, rose 0.2% monthly. The year-over-year reading held steady at 2.6%, remaining at the lowest level in three years.

What’s the bottom line? The Fed has been working hard to tame inflation, hiking its benchmark Fed Funds Rate (which is the overnight borrowing rate for banks) eleven times between March 2022 and July 2023. These hikes were designed to slow the economy by making borrowing more expensive and lowering the demand for goods, so pricing pressure and inflation would shrink.

Inflation had been making good progress lower late last year before stalling in the first quarter of this year, causing the Fed to hold rates steady since last September. However, improving readings throughout the second quarter have led to growing expectations that the Fed will cut rates at their meeting on September 18. These latest PCE numbers leave the Fed on track to make this move.

National Peanut Butter and Chocolate Day is July 23. These Peanut Butter Bars courtesy of Allrecipes are a perfect way to enjoy this winning combination.

In a medium bowl, mix 2 cups graham cracker crumbs, 2 cups confectioner’s sugar, 1 cup butter and 1 cup peanut butter until well blended. Press evenly into the bottom of an ungreased 9×13-inch pan. In a microwave safe bowl, add 1 1/2 cups chocolate chips and 4 tablespoons peanut butter. Microwave on high, stirring every 15 seconds, until smooth. Spread mixture over crust.

Refrigerate for 1 hour before cutting into 12 squares.

The Conference Board released their latest Leading Economic Index (LEI), which takes a broad look at the economy and tracks where it’s heading in the near term. June brought a 0.2% drop, which followed May’s upwardly revised 0.4% decline.

What’s the bottom line? “The US LEI continued to trend down in June, but the contraction was smaller than in the past three months,” explained Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators. The Conference Board predicts that “economic activity is likely to continue to lose momentum in the months ahead,” with cooling consumer spending pushing “GDP growth down to around 1% (annualized) in Q3 of this year.”

This correlates with the Fed’s latest Beige Book, which is a survey of economic conditions around the country. Five of the Fed’s 12 districts reported flat or declining economic growth, which was up from only two districts six weeks ago.