- The ISM Non-Manufacturing Index registered 57.1 in June, up from 45.4 in May
- The average rate for a 30-year fixed-rate mortgage was 3.03% last week, the lowest level in almost 50 years
- U.S. initial unemployment claims dropped 99,000 to 1.31 million for the week ended July 4th
U.S. Service Sector Picks Up in June: Service sector activity recovered in June as state governments increasingly eased COVID-19-related restrictions. The Institute for Supply Management (ISM) reported last week that its Non-Manufacturing Index rose to 57.1 in June, up from 45.4 in May, indicating expansion in the sector for the first time in two months (a reading above 50 indicates expansion, while a reading below 50 reflects a contraction in activity). This was the largest single-month point increase since the index’s debut in 1997. Of 14 industries surveyed, 11 reported growth for June, highlighted by Agriculture, Forestry, Fishing & Hunting, and Accommodations & Food Services.
Mortgage Rates Fall to Record Lows: According to Freddie Mac, the average rate for a 30-year fixed mortgage last week stood at 3.03%, the lowest level since the organization began tracking mortgage rates in 1971 and the sixth record-low since COVID-19 began to roil financial markets. In comparison, the 30-year fixed loan rate was 3.75% one year ago. Mortgage rates have fallen as the Federal Reserve has maintained its benchmark interest rate near zero while also purchasing bonds of different sorts, including mortgage-backed securities, in an effort to stimulate the economy. The record-low mortgage rates could help stimulate the housing market, where activity slowed in the immediate aftermath of COVID-19’s spread.
Initial Unemployment Claims Continue to Decline: The latest jobless claims report indicated that initial unemployment claims continue to fall from record highs, but still reflect the existence of meaningful pressure on the labor market. The number of initial claims in the U.S. fell by 99,000 to 1.31 million for the week ending July 4. This marked the 14th consecutive week of declines since claims hit a peak of 6.87 million in March when coronavirus-related restrictions shut down significant portions of the economy. Despite the continued decline, however, claims remain well above levels reached in previous recessions.