“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July. Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”
New Home Sales Sales of new single‐family houses in June 2022 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 8.1 percent (±15.0 percent)* below the revised May rate of 642,000 and is 17.4 percent (±11.6 percent) below the June 2021 estimate of 714,000.
Sales Price The median sales price of new houses sold in June 2022 was $402,400. The average sales price was $456,800.
For Sale Inventory and Months’ Supply The seasonally‐adjusted estimate of new houses for sale at the end of June was 457,000. This represents a supply of 9.3 months at the current sales rate.
New York, July 21, 2022… The Conference Board Leading Economic Index® (LEI)for theU.S. decreased by 0.8 percent in June 2022 to 117.1 (2016=100), after declining by 0.6 percent in May. The LEI was down by 1.8 percent over the first half of 2022, a reversal from its 3.3 percent growth over the second half of 2021.
“The US LEI declined for a fourth consecutive month suggesting economic growth is likely to slow further in the near-term as recession risks grow,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “Consumer pessimism about future business conditions, moderating labor market conditions, falling stock prices, and weaker manufacturing new orders drove the LEI’s decline in June. The coincident economic index which rose in June suggests the economy grew through the second quarter. However, the forward-looking LEI points to a US economic downturn ahead.”
“Amid high inflation and rapidly tightening monetary policy, The Conference Board expects economic growth will continue to cool throughout 2022. A US recession around the end of this year and early next is now likely. Accordingly, we’ve downgraded our forecast of 2022 annual Real GDP growth to 1.7 percent year-over-year (from 2.3 percent), while 2023 growth was downgraded to 0.5 percent YOY (from 1.8 percent).”
Median weekly earnings of the nation's 118.9 million full-time wage and salary workers were $1,041 in the second quarter of 2022 (not seasonally adjusted), the U.S. Bureau of Labor Statistics reported today.
This was 5.2 percent higher than a year earlier, compared with
a gain of 8.6 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.
July 19, 2022 ‐ The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential construction statistics for June 2022:
Building Permits Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,685,000. This is 0.6 percent below the revised May rate of 1,695,000, but is 1.4 percent above the June 2021 rate of 1,661,000. Single‐family authorizations in June were at a rate of 967,000; this is 8.0 percent below the revised May figure of 1,051,000. Authorizations of units in buildings with five units or more were at a rate of 666,000 in June.
Housing Starts Privately‐owned housing starts in June were at a seasonally adjusted annual rate of 1,559,000. This is 2.0 percent (±9.0 percent)* below the revised May estimate of 1,591,000 and is 6.3 percent (±10.2 percent)* below the June 2021 rate of 1,664,000. Single‐family housing starts in June were at a rate of 982,000; this is 8.1 percent (±12.2 percent)* below the revised May figure of 1,068,000. The June rate for units in buildings with five units or more was 568,000.
Housing Completions Privately‐owned housing completions in June were at a seasonally adjusted annual rate of 1,365,000. This is 4.6 percent (±11.7 percent)* below the revised May estimate of 1,431,000, but is 4.6 percent (±13.4 percent)* above the June 2021 rate of 1,305,000. Single‐family housing completions in June were at a rate of 996,000; this is 4.1 percent (±11.1 percent)* below the revised May rate of 1,039,000. The June rate for units in buildings with five units or more was 366,000.
Commentary on today’s U.S. Bureau of Labor Statistics Employment Situation Report
By Frank Steemers, Senior Economist, The Conference Board
The labor market continues to be strong, with 372,000 jobs added in June 2022, after a downwardly revised increase of 384,000 jobs in May. Despite gathering economic headwinds, there is still no clear indication that the labor market is cooling. However, this could change in the months ahead as other economic indicators have already signaled that economic activity is slowing amid rising inflation and Fed interest rate hikes. As a result, hiring may decelerate during the remainder of the year.
The unemployment rate remained at 3.6 percent for the fourth consecutive month. The labor force participation rate fell slightly to 62.2 percent, down from to 62.3 percent in May. Overall, employment is near its pre-pandemic level, down only 0.3 percent compared to February 2020, representing about 500,000 jobs. Job recovery has been slower for women, with employment still 0.5 percent below pre-pandemic levels, compared to 0.2 percent for men.
Job growth remains strong in leisure and hospitality, which added 67,000 jobs in June. After losing jobs in May, retail trade gained 15,400 jobs. Jobs were also added in transportation and warehousing (35,500), professional and business services (74,000), and health care and social assistance (77,800). Hiring also continued in temporary help services (5,400)—one of the better leading indicators of future employment changes in other industries.
Wage growth is still elevated, although it seems to have plateaued. Average hourly earnings grew 5.1 percent over the last 12 months and have remained between 5 and 6 percent (annual growth) since Q4 2021. The labor market is still very tight and continued hiring and retention pressures will keep wage growth elevated. Faster wage growth, in turn, will make it harder for price inflation to decelerate as companies will increase product and service prices to cover for increasing labor costs.
If there is a short and mild recession, companies would likely start to reduce hiring in reaction to slowing economic activity. The chances of layoffs would also increase and primarily impact lower-skilled workers. With hiring usually adjusting to economic activity a few months later, there could be small monthly job losses by early 2023. As a result, the unemployment rate—in June remaining at 3.6 percent—would tick up.
Still, the unemployment rate may well stay below 4 percent following a short and mild recession. This would mean labor shortages will continue to be a challenge for employers in 2023 and beyond.
New Home Sales Sales of new single‐family houses in May 2022 were at a seasonally adjusted annual rate of 696,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 10.7 percent (±18.9 percent)* above the revised April rate of 629,000, but is 5.9 percent (±22.0 percent)* below the May 2021 estimate of 740,000.
Sales Price The median sales price of new houses sold in May 2022 was $449,000. The average sales price was $511,400.
For Sale Inventory and Months’ Supply The seasonally‐adjusted estimate of new houses for sale at the end of May was 444,000. This represents a supply of 7.7 months at the current sales rate.
Building Permits Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,695,000. This is 7.0 percent below the revised April rate of 1,823,000, but is 0.2 percent above the May 2021 rate of 1,691,000. Single‐family authorizations in May were at a rate of 1,048,000; this is 5.5 percent below the revised April figure of 1,109,000. Authorizations of units in buildings with five units or more were at a rate of 592,000 in May.
Housing Starts Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,549,000. This is 14.4 percent (±8.9 percent) below the revised April estimate of 1,810,000 and is 3.5 percent (±10.7 percent)* below the May 2021 rate of 1,605,000. Single‐family housing starts in May were at a rate of 1,051,000; this is 9.2 percent (±11.0 percent)* below the revised April figure of 1,157,000. The May rate for units in buildings with five units or more was 469,000.
Housing Completions Privately‐owned housing completions in May were at a seasonally adjusted annual rate of 1,465,000. This is 9.1 percent (±22.6 percent)* above the revised April estimate of 1,343,000 and is 9.3 percent (±19.0 percent)* above the May 2021 rate of 1,340,000. Single‐family housing completions in May were at a rate of 1,043,000; this is 2.8 percent (±13.6 percent)* above the revised April rate of 1,015,000. The May rate for units in buildings with five units or more was 417,00
TARR Report 