International goods and trade deficit widened to the highest level since October 2022 on the sustained increase in imports from China, Mexico, and the European Union.
Record home prices and elevated mortgage rates are negatively impacting new home sales and also steadily lengthening the time it takes to sell homes over the last thirteen months.
Housing permits and starts dropped sharply from a year ago in May, as high interest rates weighed on the housing market. However, housing completions slightly edged up.
Total retail and food services sales edged up from the previous month in May, nonstore retail sales jumped 6.8%, and sales for food services and drinking services advanced 3.8% from a year ago, respectively.
The Federal Reserve held its target rate range steady, lifted its long-term inflation outlook, and projected only one rate cut this year and four in 2025.
The U.S. economy added 272,000 net new jobs, surpassing all expectations, but an expanding labor market also attracted more applicants, increasing the jobless rate to 4%.
New home sales in April declined from the previous month and from a year ago after elevated home prices and rising mortgage rates kept buyers away, despite rising home inventories.
Existing home sales in April declined, and the median home price rose to a record high for the month of April as home prices rose in all regions. Record-high home prices and elevated mortgage rates are keeping buyers away, despite the rise in home supply.
Building permits declined, but housing starts and completions increased in April. Building permits dropped to a 4-month low as home buyers struggled with elevated home prices and rising mortgage rates.
Shelter and gasoline inflation contributed seventy percent of the price increase in the month. Core inflation slowed to a three-year low, but prices are still rising faster than the Fed's target rate of 2%.
Producer price inflation, a measure of wholesale price inflation, rebounded in April after falling the previous month, largely because of the rise in service prices.
The U.S. economy added jobs at a slower pace in April, and job additions in February and March were lowered by 22,000. Wages increased at an annual pace of 3.9%. Both the unemployment rate, at 3.9%, and the number of unemployed people, at 6.5 million, changed little in April.
The international goods and services trade deficit held steady near a 10-month high in March. The trade deficit rose with China and the European Union but eased with Mexico.
