Publications

U.S. Economic Indicators

The National Association of Realtors Pending Home Sales Index rose 44.3% in May (down 5.1% year-over-year). NAR reports that the historic monthly gain in contract signings could be a sign that the housing market is poised to lead the way to a broader economic recovery. NAR Report

U.S. News

The Wall Street Journal reports that banks are cutting back sharply on consumer lending as they struggle to assess borrowers’ creditworthiness as many missed loan payments aren’t reflected in credit reports per certain provisions of the coronavirus stimulus package. As loan originations fall to record lows, lenders are looking at new data sets, including phone records and deposit data, to better assess borrower risk. WSJ

The Financial Times reports that the United States-Mexico-Canada Agreement (USMCA), set to replace NAFTA on Wednesday, is facing a rocky start amid strained supply chains from the pandemic and investor discomfort with recent Mexican policy changes. The current situation could be a golden opportunity for attracting investors to North America as companies seek to diversify supply networks outside of China. FT

U.S. Economic Indicators

Real disposable personal income decreased 5.0% in May, while real personal consumption expenditures (PCE) increased 8.1%. The PCE price index rose 0.1% (up 0.5% Y/Y), and the core price index (excluding food and energy) increased 0.1% (up 1.0% Y/Y). BEA Report

The University of Michigan Consumer Sentiment Index rose 5.8 points to 78.1 in the final June reading but is down 25.9 points from June of last year. The Index of Consumer Expectations rose 6.4 points to 72.3, while the Current Economic Conditions Index rose 4.8 points to 87.1. University of Michigan

U.S. News

The Washington Post reports that cash-starved state and local governments are considering steep tax hikes to help close budget deficits exacerbated by the pandemic, a risky move during an economic crisis that could impede recovery. State and local governments have already been forced to cut spending and lay off employees as revenues plummet, a trend likely to continue in the absence of significant federal support for cities and states. WaPo

U.S. Economic Indicators

The third estimate of Q1 GDP indicates that the U.S. economy contracted at an annualized rate of 5.0% in the first quarter, unchanged from the prior estimate. For the third estimate, an upward revision to nonresidential fixed investment was offset by downward revisions to private inventories, consumer spending, and exports. BEA Report

Initial jobless claims fell 60,000 to 1,480,000 last week. The four-week moving average decreased 160,750 to 1,620,750. DOL Report

New orders of manufactured durable goods rose 15.8% in May after falling 18.1% (revised) in April. Excluding transportation, new orders rose 4.0% last month after declining 8.2% the month before. Census Bureau Report

The U.S. Census Bureau Advance Economic Indicators Report shows that the goods deficit expanded to $74.3 billion in May from $70.7 billion in April. Meanwhile, wholesale inventories fell 1.2% and retail inventories fell 6.1%. Census Bureau Report

U.S. News

The New York Times reports that the IMF revised down its projection for 2020 global growth as the depth of the economic toll from coronavirus became clearer, expecting the global economy will shrink 4.9% this year instead of the 3.0% contraction predicted in April. The revised forecast is consistent with a slow and uneven global economic recovery, with the return to growth impeded by labor market “scarring” from mass job cuts and business closures. NYT

According to the Financial Times, the United States is considering imposing punitive tariffs on an additional $3.1 billion of European goods to take greater advantage of last year’s WTO decision in the ongoing US-EU dispute over aircraft subsidies. The tariff announcement comes as trade tensions between the US and EU are heating up again over the issue of how to tax American technology giants. FT

U.S. Economic Indicators

New home sales increased 16.6% in May to a seasonally adjusted annual rate of 676,000 and were up 12.7% from year-ago levels. The median sales price rose to $317,900 and the inventory of new homes declined to 5.6 months at the current sales rate. Census Bureau Report

U.S. News

According to the Financial Times, millions of Americans are at heightened risk of defaulting on their debts as unemployment remains elevated and forbearance periods begin to run out. Non-mortgage subprime debt has risen steadily over the past decade, and while households generally entered the current crisis with stronger balance sheets than before the last recession, personal savings and current forbearance programs may not be enough to bridge the gap to recovery. FT

The Wall Street Journal reports that a bipartisan group of House lawmakers is urging the White House and Federal Reserve to extend temporary debt payment relief to borrowers in the commercial-mortgage-backed securities (CMBS) market. CMBS borrowers, including hard-hit hotel and mall owners, may soon face a surge in foreclosures in the absence of a long-term relief plan. WSJ