Falling unemployment and rising home prices were the two constants in June’s economic data while the rest of the metrics we track were a mixed bag. The 3rd reading for Q1 GDP showed just a 2% annualized growth rate in the first quarter, slightly below expectations. Rising short-term interest rates and the growing specter of a global trade war are starting to work their way into the data and will likely impact the economy going forward.
The unemployment rate for May edged down to just 3.8%, the lowest reading in nearly 20 years. The underemployment rate dipped to 7.6% while the labor force participation rate fell to 62.7% Average hourly earnings edged up a higher than expected +0.3% and are now up +2.7% YoY. Initial Jobless Claims averaged 221K on the month.
Home Prices Grind Higher
Home prices continued to grind higher as June’s report on April prices showed the S&P CoreLogic CS US home price index up 6.4% YoY. New Home Sales for May surged a better than expected 6.7% while Existing Home Sales were down slightly.
Housing Starts for May rose 5.0% MoM while the MBA Mortgage Application index rose 5.1%.