Thursday's Scoop: Pause☀️

Hey friend - well done this week. I don’t know what you did, but it was great.

If you’re in NYC and like art, come check out my wife’s work and others at one of the city’s most famous art shows this weekend. I’ll be there! Get 20% off your tickets with MARISSA20.

Insiders, look out for the Weekly Scoop tomorrow.

Here’s what you need to know today to inform your work, spending, and investments…

1. Layoffs are still pretty low.

2. There’s no end in sight for the housing shortage.

3. Manufacturing slumped again in April.

Unemployment Rate: 3.9%
^{Still near the lowest rate in 50+ years}

Companies still seem relatively hesitant to cut workers amidst so much uncertainty. The Labor Department reported initial unemployment claims fell from an eight-month high last week to 222,000. That’s still pretty low by historical standards, and broad unemployment is still very low. However, continuing claims from those who have been out of work for consecutive weeks crept higher, indicating that finding a job is getting more challenging.

The manufacturing sector continues to struggle as people cut back their spending on goods. The industry that accounts for about 10% of the economy expanded in March for the first time in 1.5 years. However, the rebound was short-lived. The Federal Reserve reported a 0.3% decline in factory output last month after a 0.2% increase in March. Americans haven’t been buying as much stuff, leading to fewer orders, low production, and the longest stretch of contracting business activity since the 2007-2009 recession.

30yr Mortgage Rate: 7.2%
^{That’s up from 6.6% a year ago. (MBA)}
Median Home Price: $393,500
^{That’s up from $375K a year ago. (NAR)}

A housing shortage is keeping prices high, and it doesn’t seem like that will change anytime soon. The Commerce Department reported that new single-family home construction fell again last month, and permits for future construction slumped to an eight-month low. The National Association of Home Builders also reported that contractor sentiment slipped last month. High mortgage costs have deterred buyers and encouraged homeowners to hang on to their low rates on their current residence, stalling transactions and shrinking the available supply on the market. Government data revealed that only 728,000 housing units were on the market in the first quarter, down 36% from 2019.

The Market: ⬇️ -0.2%
S&P 500: 5,297.10
1Mo: +5% | 1Yr: +29% | 5Yr: +85%

The market inched lower on Thursday after rallying to a new record high. Investors have been celebrating the idea that the economy isn't overheating and worsening inflation, but there are increasing red flags about an economic slowdown.