- The Leading Economic Index fell by 0.7% in June, its 15th straight decline
- Retail sales rose 0.2% from May to June
- Existing home sales decreased by 3.3% in June from the prior month
Top Three Market Headlines
Leading Indicators Post 15th Straight Decline: The Conference Board reported last week that its Leading Economic Index (LEI), a composite of ten U.S. economic indicators used to indicate turning points in the economy, fell by 0.7% in June from the prior month. This marked the 15th consecutive monthly decline in the index, an occurrence not seen since 2007-08. The latest drop was primarily attributed to dimmer consumer expectations, weaker new orders, increased initial claims for unemployment, and reduced housing construction. According to the Conference Board, "June's data suggests economic activity will continue to decelerate in the months ahead."
Retail Sales Growth Slows in June: Spending at U.S. retail and food service establishments in June grew at the slowest pace in the last three months. The U.S. Department of Commerce reported last week that retail sales for the month rose just 0.2%, down from the monthly increases in May (+0.5%) and April (+0.4%). Internet sales increased 1.9% in June from the prior month, but declining sales at gas stations (-1.4%) weighed on the overall sales figure. Compared to the prior year, sales increased just 1.5%, also negatively impacted by lower sales at gas station (-22.7%), owing in large part to lower gas prices this year.
Restricted Supply Stunts Home Sales: The National Association of Realtors (NAR) announced last week that existing home homes sales fell in June to a seasonally adjusted annual rate (SAAR) of 4.16 million, down 3.3% from the prior month and 18.9% from June of last year. Factors hampering sales activity include higher mortgage rates and a shortage of homes available for sale. The lack of supply has helped sustain housing prices despite the lesser volume of sales: as reported by NAR, the median existing home sales price recorded in June was $410,200, the second highest reading since January 1999 and down only marginally from the all-time high of $413,800 last June.