Sales of existing homes fell 0.7% in May to a 4.1-million-unit annualized pace, per the National Association of REALTORS® (NAR), compared to the 1.4% decline the market was expecting. This report measures closings on existing homes in May and likely reflects people shopping for homes in March and April. The median home price reached a record high of $419,300, which was up 3% month-over-month and 5.8% year-over-year.

What’s the bottom line? While the pace of sales declined again in May, the speed at which homes sold continued to accelerate. Homes remained on the market for a shorter period in May, with the 24-day average down from 26 days in April. Plus, 30% of homes sold above list price, which rose from 27% in April. These factors both signal that demand and competition remain during this spring buying season, even in the face of elevated rates.

Inventory also saw a boost, as the 1.28 million homes available for sale at the end of May were up 6.7% from April and 18.5% from a year earlier. While this remains below healthy levels at just a 3.7 months’ supply at the current sales pace, rising inventory is certainly a step in the right direction to help improve ongoing supply constraints.

Housing data is plentiful, starting Wednesday with an update on home builder sentiment for this month. Look for May’s Housing Starts and Building Permits on Thursday, while Existing Home Sales data follows on Friday. Also of note, May’s Retail Sales will be reported on Tuesday and the latest Jobless Claims on Thursday. Plus, we’ll see an update on manufacturing for the New York region on Monday and the Philadelphia region on Thursday. The markets will also be closed on Wednesday for the Juneteenth holiday.

This easy and delicious Cherry Tart courtesy of the Food Network is perfect for marking National Cherry Tart Day on June 18. Yields 1 9-inch tart.

Preheat oven to 350 degrees Fahrenheit. To make the crust, mix 1 cup flour, 1/4 cup sugar, and 1/2 teaspoon salt in a large bowl. Add 1/2 cup butter, cut into small pieces, and pinch with fingers to create a crumb texture. Make a well in the middle and add 2 egg yolks. Quickly work in the flour mixture to create a dough; do not overmix.

Pat into a disc and refrigerate for 15 minutes, then roll dough and add to a tart pan with a removeable bottom.

To make the filling, arrange 2 cups cherries (around 50 cherries, pits removed) in the crust. Beat 3 eggs with 1/3 cup sugar, then stir in 3/4 cup crème fraiche or sour cream and 1/2 teaspoon vanilla. Pour the custard over the cherries and bake until set, around 25 minutes. Cool before serving.

The National Federation of Independent Business (NFIB) Small Business Optimism Index rose to 90.5 in May. While this is the highest reading of the year, it remains well below the historical average of 98.

What’s the bottom line? NFIB’s Chief Economist, Bill Dunkelberg, explained that “for 29 consecutive months, small business owners have expressed historically low optimism and their views about future business conditions are at the worst levels seen in 50 years.” Given that 22% of owners reported that inflation was the single most important problem in operating their business, the cooler than expected inflation readings for May were a positive development.

Initial Jobless Claims rose by 13,000 in the latest week, with 242,000 people filing new unemployment claims. This was much higher than expectations of 225,000. There were also 1.82 million people still receiving benefits after filing their initial claim, as Continuing Claims jumped by 30,000.

What’s the bottom line? Initial Jobless Claims have now risen for three straight weeks, with the latest reading the highest number of first-time filers since last August. Continuing Claims are also still trending near some of the hottest levels we’ve seen in recent years, suggesting that the pace of hiring has slowed. The Fed will be closely watching for signs of a sustained rise in unemployment as they weigh monetary policy and the timing for rate cuts, given their dual mandate and price stability and maximum employment.

The Producer Price Index (PPI), which measures inflation on the wholesale level, was also below estimates last month. Headline PPI fell 0.2% in May, with the annual reading also moving lower from 2.3% to 2.2%. Core PPI, which strips out volatile food and energy prices, was flat in May and the year-over-year reading fell from 2.4% to 2.3%.

What’s the bottom line? The favorable CPI and PPI reports brought a double dose of positive inflation news last week. Plus, some of the PPI components are factored into another important consumer inflation measure called Personal Consumption Expenditures (PCE), which is the Fed’s favored measure, and this could lead to a friendly PCE report when that data is released on June 28.

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 seventh 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? While inflation has cooled considerably after peaking in 2022, it remains above the Fed’s 2% target. Fed Chair Jerome Powell reiterated that the Fed does not expect to cut rates until members are confident that inflation is moving sustainably towards 2% as measured by annual Core Personal Consumption Expenditures (which is at 2.8% as of April). The Fed’s “dot plot” of member forecasts signaled that just one rate cut is expected before the end of the year, down from three cuts forecasted in March, though these estimates can change quickly based on upcoming data. The Fed did acknowledge that they have seen “modest further progress” toward their 2% goal, reflecting some recent friendly inflation readings as noted below.

The Fed’s two-day meeting begins Tuesday, with their Monetary Policy Statement and press conference coming Wednesday afternoon. Members will most certainly dissect the inflation data that will be reported Wednesday morning when May’s Consumer Price Index is released. An update on wholesale inflation via the Producer Price Index follows on Thursday.

Also of note, look for news on small business optimism from the NFIB on Tuesday and the latest Jobless Claims on Thursday. Investors will also be closely watching Tuesday’s 10-year Note and Thursday’s 30-year Bond auctions for the level of demand.

Celebrate National Cupcake Lovers Day on June 13 with these rich and decadent Chocolate Ganache Cupcakes courtesy of the Food Network. Yields 12 cupcakes.

Preheat oven to 325 degrees Fahrenheit. Line a muffin pan with paper liners.

Cream 1/4 pound unsalted butter (room temperature) and 1 cup sugar in the bowl of an electric mixer with the paddle attachment until light and fluffy. Add 4 extra large eggs (room temperature), 1 at a time. Mix in 1 1/3 cup chocolate syrup and 1 tablespoon vanilla extract. Add 1 cup all-purpose flour and 1 teaspoon instant coffee granules and mix until just combined. Do not overmix.

Scoop batter into prepared tin and bake for 30 minutes or until just set in the middle. Cool thoroughly in the muffin pan.

To make the ganache, cook 1/2 cup heavy cream, 8 ounces semisweet chocolate chips and 1/2 teaspoon instant coffee granules in the top of a double boiler over simmering water until smooth and warm. Dip the tops of the cupcakes into the ganache. Do not refrigerate.

CoreLogic’s Home Price Index showed that home prices nationwide rose 1.1% in April after rising 1.2% in March, showing that home price appreciation remains strong this spring. Prices are also 5.3% higher when compared to April of last year. CoreLogic forecasts that home prices will rise 0.8% in May and 3.4% in the year going forward, though their forecasts are typically on the conservative side so it’s possible appreciation will be even higher.

ICE (formally known as Black Knight) also reported that national home values rose 0.3% in April after seasonal adjustment, with their index showing that prices are 5.1% higher than a year ago.

What’s the bottom line? The latest rise in home prices reported by CoreLogic and ICE echoes the strong growth seen by other major indices like Case-Shiller and the Federal Housing Finance Agency. These reports continue to demonstrate why homeownership remains a good opportunity for building wealth through real estate.

Initial Jobless Claims rose by 8,000 in the latest week, with 229,000 people filing new unemployment claims. There were also 1.792 million people still receiving benefits after filing their initial claim, as Continuing Claims increased by 2,000.

What’s the bottom line? While Initial Jobless Claims remain low on a historical basis, Continuing Claims are still trending near some of the hottest levels we’ve seen in recent years, suggesting that layoffs remain low but the pace of hiring has slowed. This correlates with the slowdown in hiring seen in the JOLTS report, as well as the latest Job Cuts report from Challenger, Gray & Christmas, which showed that hiring announcements fell to their lowest year-to-date level in a decade.

The latest Job Openings and Labor Turnover Survey (JOLTS) showed that job openings contracted to 8.059 million in April, coming in well below estimates, while March’s openings also saw a significant revision lower from 8.488 million to 8.355 million. The hiring rate and quit rate both held steady at 3.6% and 2.2%, respectively.

What’s the bottom line? Job openings have reached their lowest level since February 2021 and are now well below the high of 12 million hit in 2022. Plus, the quit rate has also fallen over the last year, suggesting there is less poaching from other companies and fewer people feel confident about finding new employment. Overall, this data is another sign that weakness is building in the labor sector.

ADP’s Employment Report showed that private payrolls rose less than expected in May, as employers added 152,000 new jobs versus the 175,000 that had been forecasted. Job growth in April was also revised lower by 4,000 jobs. Nearly all the gains came from service-providing sectors (+149,000), with goods producers only adding 3,000 jobs due to a slowdown in manufacturing and mining.

Small businesses also continue to feel the pinch, as those with fewer than 50 employees reported 10,000 job losses. This is compared to 177,000 new jobs added among medium and large companies combined.

Annual pay gains decelerated for job changers, with ADP reporting an average increase of 7.8% in May versus 9.3% in April. Job stayers saw an average increase of 5% for the third month in a row.

What’s the bottom line? “Job gains and pay growth are slowing going into the second half of the year,” said Nela Richardson, chief economist, ADP. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”

The Bureau of Labor Statistics (BLS) reported that there were 272,000 jobs created in May, which was much stronger than the 185,000 new jobs that had been forecasted. However, negative revisions to March and April cut 15,000 jobs in those months combined while the unemployment rate rose from 3.9% to 4%, which is the highest since January 2022.

What’s the bottom line? It’s important to look at both surveys within the Jobs Report, which told two different stories regarding job growth.

The headline job number comes from the report’s Business Survey, which is based predominantly on modeling and estimations. In fact, one of the biggest reasons we saw large job gains last month was the birth/death model, where the BLS estimates new business creation relative to closed businesses and how many jobs this created.

In May, this modeling added 231,000 jobs to the headline figure, which would have shown a gain of just 41,000 jobs otherwise.

Meanwhile, the Household Survey’s job creation component (which is considered more real-time because it’s derived by calling households) showed 408,000 job losses – a huge divergence from the headline figure! Looking more closely at this data, part-time workers increased by 286,000 while full-time workers fell by 625,000, suggesting some softening in the job market despite the strong headline number.