7/20: Metro Economic Update by P. DUFFY

June Leading Economic Index rose 0.5 percent after no change in May

The U.S. LEI increased in June by 0.5 percent to 109.8 after being flat in May, pointing to continuing solid growth in the U.S. economy. The widespread growth in leading indicators, with the exception of housing permits which declined once again, does not suggest any considerable growth slowdown in the short-term.

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Beige book:  Expansion continuing, but tariffs impacting prices and supplies

Economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District where growth was described as slight. Manufacturers in all Districts expressed concern about tariffs and in many Districts reported higher prices and supply disruptions that they attributed to the new trade policies.

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June new home mortgage applications down 12 percent from May and 8.8 percent year-on-year

June mortgage applications for new home purchases decreased 12 percent since May and were down 8.8 percent year-on-year, but are not seasonally adjusted.  For the first six months of 2018, however, new home applications rose 2.5 percent year-on-year.

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Mortgage applications fall 2.5 percent as purchase loans slip

The Market Composite Index decreased 2.5 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 5.0 percent but refinances rising 2.0 percent. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.77 percent from 4.76 percent.

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Initial unemployment claims fall to lowest level since December 1969

In the week ending July 14, initial unemployment claims were 207,000, a decrease of 8,000 from the previous week’s revised level. This is the lowest level for initial claims since December 6, 1969 when it was 202,000. The 4-week moving average was 220,500, a decrease of 2,750 from the previous week’s revised average.

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