Thursday's Scoop: Pause🌤️

Hey friends - I hope you took some time to rest and honor the Juneteenth holiday yesterday.

Thanks for your patience with our break on Tuesday. I had the privilege of traveling to DC to speak at Georgetown University.

Insiders, there will be no Weekly Scoop tomorrow, given the short week.

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

1. People aren’t spending as much.

2. Layoffs are still pretty low.

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

Unemployment Rate: 4.0%
^{Still near the lowest rate in 50+ years}

Layoffs are still pretty low. The Labor Department reported that initial unemployment claims fell to 238,000 after rising to the highest level in nine months last week. While there has been a pickup in layoffs across various sectors, including education, transportation, manufacturing, and healthcare, the overall weekly rate is still fairly low. Continuing claims, those requesting unemployment insurance for consecutive weeks, rose to the highest level since January. This could indicate that it is growing more challenging to find a job.

Inflation Rate: +3.3% (YoY), +0% (MoM)
^{Policymakers aim for 2% YoY inflation. (May CPI)}

Shopping and spending continue to slow as Americans feel the strain of high living costs. Amid lower gasoline prices and promotional offers in certain categories, the Commerce Department reported a modest 0.1% increase in retail sales in May, with five out of thirteen tracked categories showing declines. Sales numbers aren’t adjusted for rising prices, so economists see this as a warning sign for the economy. Consumer spending accounts for two-thirds of total economic output, so economic growth depends on Americans spending more each month. 

30yr Mortgage Rate: 6.9%
^{That’s up from 6.7% a year ago. (MBA)}
Median Home Price: $407,600
^{That’s up from $386K a year ago. (Existing homes - NAR)}

There seems to be no end in sight for the nationwide housing shortage. The Commerce Department reported that the number of new home construction starts in May fell by 5.5%, reaching the lowest rate since June 2020. The number of permits issued for new construction also tumbled. Rising mortgage costs and low home affordability have slowed home sales and weakened the desire to build more. The National Association of Home Builders reported homebuilders' confidence hit a six-month low in June. Limited affordable housing supply has kept home prices from falling, and slowing construction efforts won’t help.

The Market: ⬇️ -0.3%
S&P 500: 5,473.17
1Mo: +3% | 1Yr: +25% | 5Yr: +86%

The market took a breather from its record-breaking run on Thursday, drifting slightly lower after notching more than 30 new record highs this year. Big Tech stocks have pulled the broader market higher, fueled by enthusiasm for AI, despite growing concerns about the economy's health.