Haver Analytics
Haver Analytics

Economy in Brief

    • Both light truck and passenger car sales rise.
    • Imports' market share strengthens.
    • Index weakens to lowest point in eight months.
    • Employment & production lead decline while supplier deliveries edge higher.
    • Price index moves up.
    • June construction spending -0.3% m/m; +6.2% y/y, the lowest since July ’23.
    • Residential private construction -0.3% m/m, led by a 1.2% decrease in single-family building.
    • Nonresidential private construction -0.1% m/m, the fourth m/m decline in five months.
    • Public sector construction -0.4% m/m, reflecting m/m drops in both residential & nonresidential public buildings.
    • Output per hour rose 2.3% saar in Q2 vs. 0.4% in Q1.
    • Compensation growth slowed more than expected.
    • So did unit labor costs—to 0.9% saar.
    • Initial claims rose 14,000 in the week ended July 27.
    • Continuing claims rose 33,000 in the week ended July 20.
    • Insured unemployment rate holds steady.
  • Asian MFG mostly turns lower in July- but it’s not trending there The final S&P manufacturing PMIs show weakening median and average readings in July. The table above shows that of the 18 reporters, only 16.7% improved month-to-month. The table sorts these observations into cohorts of PMI values. Having only 38.9% in the sweet spot of 50-55 diffusion reading cohort is telling. The 40-50 cohort growth, the first tier of output declines, houses over half of the reporters (55.6%) in July. That proportion is slightly larger for the 12-month average and has been even worse (larger) for the 12-months before that.

    In July, there are 10 reporters below the 50% breakeven mark. That total has been at 9 to 10 over three months, six months, and 12 months.

    The number (percentage) of reporters in the first upper tier of growth 55-60 has been consistent at 5.6% (one reporter).

    The pattern of the manufacturing PMI readings suggests there is a lull in manufacturing. But manufacturing has been stagnant and weak-to-contracting throughout 2023. In 2024, conditions began to improve. We are now seeing a back off in July compared to June. However, the median reading in June had improved relative to May, although the July reading is below the May median and it was last weaker in December 2023. In contrast, the average for the group is back to its April value. There is some easing of conditions, but it’s a mixed bag.

    Data-watching market-watchers are looking for consistencies and trends to jump on. Unfortunately, there is little evidence here of any new trend. July is weaker than June but 2024 has been stronger than 2023; it is far too soon to look at a one-month drop as evidence of new weakness.

    • Federal funds rate range remains at 5.25% - 5.50%, where it’s been since early-August 2023. Range remains highest since March 2001.
    • Fed maintains focus on inflation reduction.
    • Moderation of labor market strength & progress toward 2% inflation goal is noted.
    • PHSI +4.8% in June vs. -1.9% in May; the first m/m rise since March.
    • Home sales gain m/m in all four regions, w/ the highest m/m rate in the South (6.3%)
    • Home sales decrease y/y in the Northeast, Midwest and South, but rebound y/y in the West (1.0%).