Money Talk Podcast

Landaas & Company newsletter  September edition now available.

Advisors on This Week’s Show

KYLE TETTING

ART ROTHSCHILD

PAIGE RADKE

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Sept. 19-23, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

No major announcements

Tuesday

As mortgage rates continued to climb, the U.S. housing industry showed signs of sputtering in August. Both housing starts and building permits remained below recent highs, according to the Commerce Department. The annual rate of housing starts rose to 1.6 million, 12% above the July pace but more than 10% below the rate in April, which was the highest since 2006. Meantime, the August pace for permits declined for the fifth month in a row, down 14% from the year before. The annual rate of housing completions was 1.3 million, around the pace in 2007, before the financial collapse. Construction of new houses remained elevated with the pace of housing under constructions surpassing 1.7 million, the most in data back to 1970.

Wednesday

The annual rate of existing home sales fell 0.4% to 4.8 million in August, the seventh consecutive decline and 20% below the year-ago pace. The National Association of Realtors blamed rising mortgage interest rates for dampening demand. The trade group said higher financing costs also deterred potential sellers from moving. Inventories declined in August for the first time in six months but were at about half the level considered sustainable. House prices continued to rise for a record 126th consecutive month. The median sales price of $389,500 was up nearly 8% from August 2021.

The Federal Reserve Board's policy making committee announced a unanimous agreement to increase overnight lending rates to the range of 3% to 3.25% in a continuing effort to slow down the U.S. economy to tame decades-high inflation rates. The Federal Open Market Committee issued a statement suggesting it would consider further interest rate increases to try to bring inflation closer to its long-range goal of 2%.  The Fed's preferred measure of inflation showed a 6.3% rate in July.

Thursday

Labor market conditions continued improving. The four-week moving average for initial unemployment claims declined for the fourth week in a row, reaching its lowest point in three months and falling 41% below the 55-year average. The Labor Department said total claims fell 7% from the week before to just below 1.3 million. The year before, total claims were 11.2 million.

The Conference Board’s index of leading economic indicators sank 0.3% in August, its sixth monthly decline. The index dropped 2.7% in the latest six months as opposed to a gain of 1.7% in the previous six months. The reversal prompted the business research group to say that because of tightening monetary policies by the Federal Reserve, the U.S. could slide into recession “in the coming quarters.”

Friday

No major announcements

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 10868, down 580 points or 5.1%

Standard & Poor’s 500 – 3693, down 180 points or 4.6%

Dow Jones Industrial – 29593, down 1230 points or 4.0%

10-year U.S. Treasury Note – 3.70%, up 0.25 point

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Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Tom Pappenfus

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Sept. 12-16, 2022)

Significant Economic Indicators & Reports

Monday

No major announcements

Tuesday

Inflation remained relatively high in August, though it continued to recede from recent levels. The Bureau of Labor Statistics said the Consumer Price Index added 0.1% from July. That followed no change in July but was below the 12-month average of 0.7%. The critical year-to-year inflation rate was 8.3%, down from 8.5% in July and a 40-year high of 9.1% in June. Gasoline prices fell 11% for the month, offsetting broad gains including shelter, medical care and household furnishings. Gas was up 26% from August 2021. Excluding volatile food and energy prices, the core CPI rose 0.6% in August. Year to year, the core CPI was up 6.3%, up from 5.9% in both June and July.

Wednesday

Inflation on the wholesale level also eased in August, the Bureau of Labor Statistics reported. The Producer Price Index declined for the second month in a row, led by a decrease in prices for goods, heavily influenced by a 13% drop in gasoline prices. Excluding volatile prices for foods, energy and trade, the core PPI advanced 0.2% from July. Wholesale inflation rose 8.7% from August 2021, the smallest 12-month increase in a year. The core measure rose 5.6% year to year, the weakest since June 2021.

Thursday

The Commerce Department reported a 0.3% rise in retail sales in August, led by online stores, where sales grew nearly 3% from July. Sales rose at eight of the 13 major retail categories. Sales at bars and restaurants gained 1%. Gas stations led decliners with a 4% drop in revenue because of lower prices. Adjusted for inflation (the lower line in the graphic below), retail sales rose in August for the first time in four months; they were 14% ahead of where they were in February 2020, just before the pandemic.

The four-week moving average for initial unemployment claims fell for the third time in four weeks., dropping to its lowest level since mid-June. According to Labor Department data, the average moved to 224,000 new applications, down from a record 5.3 million in April 2020 and 39% below the 55-year average. Just under 1.4 million Americans claimed jobless benefits in the latest week, down nearly 2% from the week before and down from more than 12 million the year before.

U.S. industrial output fell 0.2% in August, the first decline in three months. A 2.3% drop in production from utilities dragged the measure down, the Federal Reserve reported. Output from factories rose 0.1% while the mining industry registered no change. Since August 2021, overall industrial production rose nearly 4%. Capacity utilization continued to show inflation pressure. Although it declined slightly to 80% from 80.2% in July, the operating rate stayed above the 50-year average of 79.6% for the sixth month in a row.

Friday

Consumer sentiment continued improving slightly in September from “extremely low” levels earlier in the summer, the University of Michigan reported. A preliminary look at survey data suggested ongoing uncertainty over inflation, though the most optimistic outlook for long-term prospects in a year or more. Sentiments toward personal finances and big-ticket buying plans remained relatively low, a possible signal that consumers may be pulling back on spending, which probably would slow economic growth.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11448, down 664 points or 5.5%

Standard & Poor’s 500 – 3873, down 194 points or 4.8%

Dow Jones Industrial – 30822, down 1330 points or 4.1%

10-year U.S. Treasury Note – 3.46%, up 0.13 point

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Advisors on This Week’s Show

Kyle Tetting

Art Rothschild

Paige Radke

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Sept. 5-9, 2022)

Significant Economic Indicators & Reports

Monday

Markets and government agencies closed for Labor Day

Tuesday

The U.S. service sector expanded in August for the 27th month in a row and at a slightly faster pace for the third consecutive month, according to the Institute for Supply Management. The industry group surveyed purchasing managers who said business activity, new orders and employment all grew at higher rates in August. Survey respondents also reported improvements in supply chains, logistics and costs, despite ongoing materials shortages. Based on its index, the ISM suggested the country’s gross domestic product was growing at an annual pace of 2.5%.

Wednesday

The U.S. trade gap narrowed by nearly 13% in July to $70.6 billion, down four months in a row after reaching a record $107 billion deficit in March. The Bureau of Economic Analysis reported exports rose 0.2% in July, including increased sales abroad of cars, foods, industrial supplies and travel services from the U.S. At the same time, imports declined by 2.9%, led by sales of consumer goods from other countries. Through the first seven months of 2022, the trade deficit rose 29% from the year before to $137 billion, with a 20% rise in exports and a 22% rise in imports.

Thursday

The four-week moving average of initial unemployment claims fell for the third time in four weeks, dropping to the lowest point since July and 37% below the 55-year average. New claims had been rising marginally since hitting an all-time low in April, but they're a fraction of their level at the onset of the COVID pandemic. In further evidence of the strength of the employment market, the Labor Department reported that total claims declined nearly 2% from the previous week to 1.4 million, as opposed to nearly 12 million claims the year before.

In a sign of continued consumer spending, the Federal Reserve Board reported another rise in consumer credit debt outstanding in July. Total debt rose at a 6% annual rate. More significantly, revolving credit climbed at a nearly 12% clip. Revolving credit mostly includes credit card debt and is indicative of consumer spending, which drives nearly 70% of U.S. economic activity. Revolving debt surpassed its pre-pandemic level in April and was 3.5% above that mark in July. It took a decade for revolving credit to recover from the financial collapse that precipitated the Great Recession.

Friday

No major releases

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12112, up 481 points or 4.1%

Standard & Poor’s 500 – 4067, up 143 points or 3.6%

Dow Jones Industrial – 32152, up 833 points or 2.7%

10-year U.S. Treasury Note – 3.32%, up 0.13 point

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Advisors on This Week’s Show

Kyle Tetting

Paige Radke

Kendall Bauer

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Aug. 29-Sept. 2, 2022)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

Higher mortgage rates may be dampening demand for home buying, but house prices continued to rise near historic rates. According to the S&P CoreLogic Case-Shiller national index, prices rose 18% in June from the year before. That was a slowdown from nearly 20% in May and a record 21% in March. A spokesperson for the longstanding measure said despite three months of decelerated price increases, the market remained “robust” with double-digit increases reported for each of the 20 cities in the composite index.

The Conference Board reported that its consumer confidence index improved in August for the first time in four months. The business research group said concerns about inflation remained high, though they had declined a bit. Expectations rose from a nine-year low in June. Consumers’ attitudes toward current conditions gained for the first time in five months. Intentions to make major purchases and take vacations improved. The Conference Board said consumers remained squeamish about inflation and rising interest rates.

The labor market showed strength in July with nearly twice the number of job openings as there were unemployed job seekers. The Bureau of Labor Statistics said employers had 11.2 million openings in July, vs. a separate report earlier counting about 5.7 million people as unemployed in July. Not every job seeker would qualify for every opening, but the comparison suggests how much supply and demand are out of balance. July marked the first time in four months that openings increased. The number of workers quitting their jobs — a measure of employee confidence — declined for the fourth month in a row but stayed close to the record high of 4.5 million quits last November.

Wednesday

No major releases

Thursday

The four-week moving average for initial unemployment claims fell for only the second time in the 21 weeks since hitting an all-time low in early April. At 241,500 new applications, the average was 35% below the 55-year average, according to Labor Department data. In total, 1.4 million Americans claimed unemployment compensation in the latest week, down less than 1% from the week before and down from more than 12 million the year before.

The Bureau of Labor Statistics said worker productivity sank at an annual rate of 4.1% in the second quarter, revised from an initial estimate of a 4.6% decline. The annual rate for output fell 1.4%, revised from a decline of 2.1%. The pace of hours worked rose 2.7%. Compared to the second quarter of 2021, productivity dropped 2.4%, the biggest year-to-year dip in data going back to 1948. In the last year, unit labor costs — which measure worker compensation against productivity — rose 9.3%, the most since 1982.

The manufacturing sector expanded in August at the same pace as July, which was the weakest in two years. Still, the Institute for Supply Management reported that manufacturers broadly and collectively grew for the 27th month in a row. The trade group said its surveys of purchasing managers indicated "at least a slight easing of supply chain congestion." Based on past relationships between the index and gross domestic product, the group said the overall economy was expanding at a 1.4% annual growth rate.

The Commerce Department said construction spending declined in July, down for the second month in a row after hitting an all-time high of nearly $1.8 trillion in May. Home construction spending fell 1.5% from June’s pace but was 14% ahead of July 2021. Public construction spending rose 1.5% from June, led by expenditures on highways and streets.

Friday

U.S. employers continued adding jobs in August, and the unemployment rate ticked up as more job seekers entered the pool from the sidelines. The Bureau of Labor Statistics said payrolls expanded by 315,000 jobs in August, an addition of 5.8 million in the last year, pushing employment 240,000 positions past the mark in February 2020, just before the pandemic. The unemployment rate rose to 3.7%, up from 3.5% in July, which was also the level in February 2020 and the lowest since 1969. The government report showed 344,000 more workers looking for jobs in August at the same time that 361,000 fewer people said they wanted work but weren’t actively looking.

Despite an increase in orders for cars and parts, U.S. factory orders declined in July for the first time in 10 months. Orders were down 1% from June and down 1.1% excluding the volatile transportation category. Since July 2021, total orders rose 13%; excluding transportation, orders rose 12.5%. Core capital goods orders, considered a proxy for business investments, rose 0.3% for the month and 10% from July 2021.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11631, down 511 points or 4.2%

Standard & Poor’s 500 – 3924, down 133 points or 3.3%

Dow Jones Industrial – 31319, down 965 points or 3.0%

10-year U.S. Treasury Note – 3.19%, up 0.16 point

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Advisors on This Week’s Show

Kyle Tetting

Dave Sandstrom

Steve Giles

(with Max Hoelzl, Joel Dresang, engineered by Jason Scuglik)

Week in Review (Aug. 22-26, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

No significant releases

Tuesday

The annual sales rate of new houses sank 12.6% in July and was 30% below the year-ago pace. The yearly rate of 511,000 houses sold was the lowest in six and a half years, according to the Commerce Department. The median sales price for a new house rose 8% from July 2021 to a record $439,400, Commerce reported. Meantime, the inventory of new houses for sale rose to 464,000, the most since March 2008.

Wednesday

In another sign of weakened housing, the National Association of Realtors reported a second consecutive drop in pending home sales in July. The trade group said its index declined 1% from June, the eighth fall in nine months. The index was down 20% from July 2021. The association said affordability is at its lowest point since 1989, with the typical mortgage payment up 54% from the year before. However, it suggested the housing market could revive in early 2023 if mortgage rates steady and the labor market stays strong.

The Commerce Department said new orders for durable goods fell less than 0.1% in July, the first decline in four months. Commitments for commercial aircraft led a broad array of gains. Excluding the volatile transportation sector, orders rose 0.3% from June, better than analysts expected. Overall, demand for long-lasting manufactured items was up 11% from July 2021. Core capital goods orders, a proxy for business investments, rose 0.4% from June and were 10% ahead of the year before.

Thursday

The four-week moving average for initial unemployment insurance claims rose for the 18th time in the 20 weeks since hitting an all-time low in early April. At 247,000 claims, the average was the highest it has been since Thanksgiving, although it was still 33% below the 55-year average. The Labor Department reported that 1.4 million Americans claimed jobless benefits in the latest week, down 2% from the week before and down from 12 million the year before.

The U.S. economy receded at a 0.6% annual rate in the second quarter, down from an initially estimated decline of 0.9%, the Bureau of Economic Analysis reported. Consumer spending, which drives about 70% of  gross domestic product, rose at a pace of 1.5%, slightly better than the previous estimate of 1%. Upward revisions for inventories, exports and spending by state and local governments also moderated the second-quarter decline. Adjusted for inflation, the economy expanded by 1.7% from the second quarter of 2021; it grew 2.6% from the end of 2019, just before the pandemic.

Friday

The Bureau of Economic Analysis said consumer spending rose by 0.1% in July, suggesting continued economic growth though at a slower pace. That was down from a 1% gain in June. Personal income also weakened in July, a trend that has contributed to lower savings for consumers. In July, Americans saved 5% of disposable income, down from 8.3% in February 2020, at the onset of the COVID-19 pandemic. The report also showed that the Federal Reserve’s main gauge of inflation declined by 0.1% in July and was up 6.3% from the year before. In June, the one-year inflation rate was 6.8%, still far above the Fed’s long-term target of 2%.

Considered a precursor to spending, consumer sentiment rose in August as slower inflation boosted economic expectations. Noting that “overall sentiment remains extremely low by historical standards,” the University of Michigan said its index rose to 58.2 in August from 51.5 in July. It read 70.3 the year before. The survey’s director said consumers’ economic outlooks rose after two months at the lowest level since the Great Recession. Expectations for personal finances rose broadly with a slight easing in concerns about inflation.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12142, down 564 points or 4.4%

Standard & Poor’s 500 – 4058, down 171 points or 4.0%

Dow Jones Industrial – 32283, down 1424 points or 4.2%

10-year U.S. Treasury Note – 3.04%, up 0.05 point

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Landaas & Company newsletter  August edition now available. Advisors on This Week’s Show Kyle Tetting Art Rothschild Dave Sandstrom (with Max Hoelzl, engineered by Jason Scuglik) Week in Review (Aug. 15-19, 2022) Significant Economic Indicators & Reports Monday No major announcements Tuesday Housing construction data showed declines in July amid the rising costs of financing. Both building […]

Landaas & Company newsletter  August edition now available.

Advisors on This Week’s Show

Kyle Tetting

Steve Giles

Paige Radke

(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

Week in Review (Aug. 8-12, 2022)

Significant Economic Indicators & Reports

Monday

No major releases

Tuesday

The Bureau of Labor Statistics said second-quarter worker productivity sank by a record 2.5% from the year before. The decline, the worst in 74 years of data, resulted from a 1.5% increase in output and a 4.1% increase in hours worked. At an annualized rate, productivity fell 4.6% from the first quarter. Productivity is a volatile indicator of how well the U.S. economy is performing based on labor input. On average, productivity has gained 2.1% per year since 1948. The average annual growth since the pandemic has been 0.6%. The same report showed unit labor costs rising 9.5% over the last four quarters. That was the most in 40 years.

Wednesday

The broadest measure of inflation eased in July as gasoline prices continued to decline. The Bureau of Labor Statistics said the Consumer Price Index was unchanged from June after rising every month for more than two years. Although the price of food rose more than 1% for the month, the average cost of gas fell nearly 8%. The core CPI, which excludes volatile food and energy costs, rose 0.3% from June but with notable declines for used cars and air fares. Compared to July 2021, the CPI gained 8.5%, down from 9.1% in June, which was the highest since November 1991. The core CPI rose 5.9% from the year before, falling from the previous level for the fourth month in a row.

Thursday

The four-week moving average for initial unemployment claims continued to rise after hitting an all-time low 17 weeks before. The level of 252,000 new applications was the highest since Thanksgiving, and although it was 32% below the 55-year average, it was 31% above where it was just before the pandemic. A report from the Labor Department said the total number of claims rose 2% in the latest week to nearly 1.4 million. That was down from nearly 3 million the year before.

Inflation on the wholesale level declined 0.5% in July, led by a drop in gasoline prices. The Bureau of Labor Statistics said its Producer Price Index showed the demand for goods falling 1.8% from June — 80% owed to a 17% fall in gas prices. Excluding volatile prices for energy, food and trade services, the core PPI rose 0.2% for the month. Since July 2021, the PPI rose 9.8% — the lowest since October but still well above the Federal Reserve’s target for 2% annual inflation. In the last year, the core PPI rose 5.8%, the lowest in 13 months.

Friday

Consumer attitudes improved slightly in early August from record low levels in June and July, according to the University of Michigan consumer sentiment index. The longstanding index rose to 55.1 in a preliminary August reading from 51.5 in July. It stood at 70.3 August 2021. Expectations rose broadly, especially among low- and middle-income respondents. Inflation continued to concern consumers, with 48% of respondents blaming it for eating into their living standards. Consumers’ expectations of future inflation continued to settle at lower levels.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 13047, up 390 points or 3.1%

Standard & Poor’s 500 – 4280, up 135 points or 3.3%

Dow Jones Industrial – 33761, up 958 points or 2.9%

10-year U.S. Treasury Note – 2.85%, up 0.01 point

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Landaas & Company newsletter  August edition now available.

Advisors on This Week’s Show

KYLE TETTING

ART ROTHSCHILD

CHRIS EVERS

(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

Week in Review (August 1-5, 2022)

Significant Economic Indicators & Reports

Monday

The manufacturing sector expanded in July for the 26th month in a row, though at the slowest pace in two years, according to the Institute for Supply Management. The trade group’s index, based on surveys of purchasing managers, showed demand weakening for the second consecutive month, which has helped unclog some supply chains and ease price pressures. Executives expressed optimism for their businesses despite observations of the economy slowing.

The Commerce Department said construction spending contracted 1.1% in June. Seasonally adjusted annual spending on single-family housing led a broad array of declines. Residential projects made up more than half of total construction spending.

Tuesday

Employers’ demand for workers eased slightly in June, with job openings falling to 10.7 million, down for the third consecutive month after peaking at nearly 12 million in March. Data from the Bureau of Labor Statistics showed openings still well above the pre-pandemic high of 7.5 million. Meantime, the levels of hires and separations stayed steady. Volunteer quits, a measure of employee confidence, remained historically high at 4.2 million.

Wednesday

Demand for manufactured goods continued in June as factory orders rose for the 13th time in 14 months. The value of orders rose 2% from May, with double-digit increases for military aircraft, household appliances and photographic equipment. The Commerce Department reported that orders increased 14% from June 2021. Excluding volatile orders for transportation equipment, demand rose 13% from the year before.

The service sector grew in July at the fastest rate in four months, according to the Institute for Supply Management. The trade group’s service index showed expansion for the 26th month in a row with more orders and business activity. Hiring slowed, but so did back orders and prices. The ISM said its index suggested the gross domestic product was growing at a 2.4% annual rate.

Thursday

The U.S. trade deficit narrowed 6.2% in June to $79.6 billion, the lowest since December, according to the Bureau of Economic Analysis. Exports grew 1.7% from May, led by non-monetary gold and natural gas. Imports declined 0.3%, led by automotive products. Through the first half of 2022, the gap between what the U.S. sells abroad and what it consumes from other countries rose 33% from the year before, with exports growing 20% and imports gaining 23%.

The four-week moving average for initial unemployment claims rose again, as it has every week since hitting an all-time low in early April. The average reached 254,750, the highest since November, though it remained 31% below the 55-year average. The Labor Department said nearly 15 million Americans claimed jobless benefits in the latest week, down 0.3% from the week before and down from 13 million the year before.

Friday

U.S. employers added 528,000 jobs in July, pushing employment back to where it dropped off at the onset of the COVID-19 pandemic in February 2020. The unemployment rate also returned to 3.5% for the first time since February 2020, the Bureau of Labor Statistics reported. The jobs recovery represents a rebound of 22 million positions lost little more than two years ago. The unemployment rate was down from a record 14.7% in April 2020. While many measures were at or better than their pre-pandemic marks, notable exceptions included a lower participation rate in the labor force, more long-term unemployment and permanent job losses and a deficit of 1.2 million jobs (7%) in the leisure and hospitality industry.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12658, up 267 points or 2.2%

Standard & Poor’s 500 – 4145, up 15 points or 0.4%

Dow Jones Industrial – 32803, down 42 points or 0.1%

10-year U.S. Treasury Note – 2.84%, up 0.2 point

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Advisors on This Week’s Show

Brian Kilb

Dave Sandstrom

Kendall Bauer

(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

Week in Review (July 25-29, 2022)

SIGNIFICANT ECONOMIC INDICATORS & REPORTS

Monday

No major releases

Tuesday

The year-to-year increase in residential prices slowed in May for the second month in a row. The S&P CoreLogic Case-Shiller national home price index rose 19.7% from the year before, down from 20.6% in April. Of 20 cities tracked in a composite index, 16 had lower increases in May, but all 20 saw double-digit gains. A spokesman for the index projected that further price gains will narrow as rising financing costs for houses take a toll on demand.

The Conference Board said its consumer confidence index declined in July for the third month in a row, suggesting slower economic growth entering the third quarter and raising the risk of recession. July’s drop-off in optimism occurred mostly in consumer expectations. The business research group said ongoing concerns about inflation were holding back more consumers’ plans to buy big-ticket items. About 70% of the U.S. economy is driven by consumer spending.

The annual rate of new home sales fell in June, dropping 8% from May and down 17% from the pace in June 2021. The Commerce Department reported that the inventory of unsold houses rose to their highest level since May 2009. Meanwhile, the median price of new houses rose to $402,400, up 7% from June 2021. Half of the houses sold in June cost $400,000 or more, compared to 34% in all of 2020.

Wednesday

Manufacturing demand remained high in June, with durable goods orders rising for the eighth time in nine months. Orders rose 1.9% from May, with broad gains led by an 80% jump in contracts for military aircraft. Excluding the volatile transportation category, the value of orders rose 0.4% from May, according to figures from the Commerce Department. Core capital goods orders, a proxy for business investment, rose 0.5% from May and 10% from June 2021.

The National Association of Realtors blamed rising mortgage rates and high prices for dampening demand for real estate in June. The trade association said its pending home sales index dropped 8.6% from May and 20% from the year before. The Realtors said home buying is 80% more expensive than it was three years ago and that nearly a quarter of those who bought a house in 2019 wouldn't qualify to buy now. The association projected a 13% decline in sales in 2022.

Thursday

The U.S. economy sank at an annual pace of 0.9% in the second quarter, the second consecutive decline, following a 1.6% setback in the first three months of the year. Adjusted for inflation, gross domestic product rose 1.6% from the same time in 2021 and was up 2.5% from the peak before the pandemic, according to new data from the Bureau of Economic Analysis. Although two consecutive quarters of declining GDP is a common shorthand for economic recession, the actual definition is more complicated. Some officials say the latest data fall short of showing a recession yet.

The four-week moving average for initial unemployment claims continued rising since hitting an all-time low in early April. The Labor Department reported the moving average at nearly 250,000 claims, the highest since November and up from about 170,000 in April. The level was 30% above the low point just before the pandemic yet 33% lower than the 55-year average. In the latest week, nearly 1.5 million Americans claimed jobless benefits, up 9% from the week before but down from 13.1 million the year before.

Friday

The Bureau of Economic Analysis said consumer spending rose 1.1% in June, although it was just 0.1% after adjusting for inflation. Personal income gained 0.6% in June, the same as in May. As a result of increased spending on steady income, the personal saving rate fell to 5.1%, the lowest since August 2009. The personal consumption expenditures index, which the Fed follows for inflation, rose 6.8% from June 2021, the highest since January 1982.

Often a pre-cursor to spending, consumer sentiment, was little changed in July after hitting an all-time low in June, according to a longstanding survey from the University of Michigan. Consumers’ assessment of current economic conditions improved slightly, but inflation continued to weigh heavily on sentiments. Even so, expectations for long-term inflation stayed steady with outlooks expressed in recent months.

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 12391, up 557 points or 4.7%

Standard & Poor’s 500 – 4130, up 169 points or 4.3%

Dow Jones Industrial – 32845, up 946 points or 3.0%

10-year U.S. Treasury Note – 2.64%, down 0.14 point

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Landaas & Company newsletter  July edition now available.

Advisors on This Week’s Show

Brian Kilb

Steve Giles

Paige Radke

(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

Week in Review (July 18-22, 2022)

Significant economic indicators & reports

Monday

No major releases

Tuesday

The U.S. housing market slowed amid rising mortgage rates in June. The annual rates for both housing starts and building permits declined from May, although they both remained above levels just before the pandemic, which were the highest since the Great Recession. A Commerce Department report showed housing under construction reaching an all-time peak for the fourth month in a row after surpassing the record set in 1973. The pace of construction for single-family houses slowed for the second consecutive month.

Wednesday

The pace of existing home sales slowed for the fifth month in a row in June, though time on the market hit a record low and the median price reached a record high. The National Association of Realtors said the annual sales rate dipped to 5.12 million existing houses, down 5.4% from May and down 14% from June 2021. The trade group blamed the rise in mortgage rates and high prices for discouraging more wannabe home buyers. The median sales price in June hit $416,000, up 13% from the year before and the 124th consecutive year-to-year increase. Meanwhile, houses that sold tended to go fast. The typical house sold in 14 days in June, the quickest in 11 years of data.

Thursday

Except for one week of no change, the four-week moving average for initial unemployment claims rose for the 15 weeks since hitting an all-time low in early April. The 240,500 average claims were the highest since the beginning of December and 25% above the low just before the pandemic. At the same time, the measure of employers' reluctance to let workers go was 35% below the 55-year average, according to Labor Department data. In the latest week, total claims dropped 3% to 1.3 million, down from 12.6 million the year before.

The Conference Board said its index of leading economic indicators “points to a US economic downturn ahead.” The index from the business research group fell 0.8% in June, its fourth consecutive deceleration in growth. The group said consumer pessimism, weaker labor conditions, lower stock prices and softer factory orders sank the June index. Considering high inflation and Fed moves to raise interest rates, the Conference Board downgraded its forecast for real gross domestic product to a 1.7% increase from 2021 (from an earlier projection of 2.3% growth) with a 0.5% rise in 2023 (down from 1.8%).

Friday

No major announcements

MARKET CLOSINGS FOR THE WEEK

Nasdaq – 11834, up 382 points or 3.3%

Standard & Poor’s 500 – 3962, up 99 points or 2.6%

Dow Jones Industrial – 31889, up 613 points or 2.0%

10-year U.S. Treasury Note – 2.78%, down 0.15 point

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