by Calculated Risk on 7/31/2025 05:00:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for July. The consensus is for 118,000 jobs added, and for the unemployment rate to increase to 4.2%. There were 147,000 jobs added in June, and the unemployment rate was at 4.1%.

Important: As I noted earlier, the large increase in seasonally adjusted education hiring in June was probably a seasonal adjustment issue. There will likely be payback in the July report, and it is possible we will see a seasonally adjusted decline in state and local education of 50 thousand or more for July.

From Goldman Sachs:

We forecast a 100k increase in payrolls in July. Big data indicators point to a rebound in private sector job growth, though to a still soft pace. ... We expect the unemployment rate to rebound to 4.2% based on the signal from other measures of labor market slack such as continuing jobless claims.
emphasis added

From BofA:

July NFP are likely to rise by 60k. State & local gov’t jobs should drop after spiking in June. Meanwhile, we think private payrolls will pick up to +85k because of the ongoing decline in initial claims. It is probably too early to see a big impact from immigration policy. But high continuing claims and unfavorable seasonals could be headwinds. ... The u-rate should rise to a still-benign 4.2%.

• ADP Report: The ADP employment report showed 104,000 private sector jobs were added in July.  This was above consensus forecasts and suggests BLS reported job gains at consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Not available yet for July.

• Unemployment Claims: The weekly claims report showed fewer initial unemployment claims during the reference week at 230,000 in July compared to 246,000 in June.  This suggests fewer layoffs in July compared to June.

• Conclusion: Over the last 6 months, employment gains averaged 130 thousand per month.  The ADP report and unemployment claims suggest a decent month.  However, my guess is we will start to see the impact of policy - a little more hiring hesitancy - and I expect a hit from education hiring (SA), so I'll take the under for July.

by Calculated Risk on 7/31/2025 02:42:00 PM

From STR: U.S. hotel results for week ending 26 July

The U.S. hotel industry reported negative year-over-year comparisons, according to CoStar’s latest data through 26 July. ...

20-26 July 2025 (percentage change from comparable week in 2024):

• Occupancy: 71.5% (-0.7%)
• Average daily rate (ADR): US$164.88 (-0.1%)
• Revenue per available room (RevPAR): US$117.88 (-0.8%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed purple is for 2018, the record year for hotel occupancy. 

The 4-week average of the occupancy rate is tracking behind last year and the median rate for the period 2000 through 2024 (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average will likely increase over the next week or two.

On a year-to-date basis, the only worse years for occupancy over the last 25 years were pandemic or recession years.

by Calculated Risk on 7/31/2025 11:58:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Declined in June; Up 2.0% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased -0.20% month-over-month (MoM) on a seasonally adjusted (SA) basis in June. On a year-over-year (YoY) basis, the National FMHPI was up 2.0% in June, down from up 2.3% YoY in May. The YoY increase peaked at 19.0% in July 2021, and for this cycle, bottomed at up 0.9% YoY in April 2023. ...

As of June, 32 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-5.4), West Virginia (-3.7%), Colorado (-2.9%), and Florida (-2.7%).

For cities (Core-based Statistical Areas, CBSA), 250 of the 384 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda has passed Austin as the worst performing city. Note that 5 of the 6 cities with the largest price declines are in Florida. And 12 of the 30 cities are in Florida.

There is much more in the article!

by Calculated Risk on 7/31/2025 09:01:00 AM

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through June 2025.

CPI Shelter was up 3.8% year-over-year in June, down from 3.9% in May, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 4.1% YoY in June, unchanged from 4.1% in May and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year as rents for existing tenants continue to increase.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):

Key measures are above the Fed's target on a 3-month basis. 

3-month annualized change:

PCE Price Index: 2.5%
Core PCE Prices: 2.6%
Core minus Housing: 2.4%

by Calculated Risk on 7/31/2025 08:35:00 AM

From the BEA: Personal Income and Outlays, June 2025

Personal income increased $71.4 billion (0.3 percent at a monthly rate) in June, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $61.0 billion (0.3 percent) and personal consumption expenditures (PCE) increased $69.9 billion (0.3 percent).

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $69.5 billion in June. Personal saving was $1.01 trillion in June and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.5 percent.

From the preceding month, the PCE price index for June increased 0.3 percent. Excluding food and energy, the PCE price index also increased 0.3 percent.

From the same month one year ago, the PCE price index for June increased 2.6 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.
emphasis added

The June PCE price index increased 2.6 percent year-over-year (YoY), up from 2.3 percent YoY in May.

The PCE price index, excluding food and energy, increased 2.8 percent YoY, up from 2.7 percent in May.

The following graph shows real Personal Consumption Expenditures (PCE) through June 2025 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was at expectations and PCE was below expectations.

Inflation was slightly above expectations.

by Calculated Risk on 7/31/2025 08:30:00 AM

The DOL reported:

In the week ending July 26, the advance figure for seasonally adjusted initial claims was 218,000, an increase of 1,000 from the previous week's unrevised level of 217,000. The 4-week moving average was 221,000, a decrease of 3,500 from the previous week's unrevised average of 224,500.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 221,000.

The previous week was unrevised.

Weekly claims were lower than the consensus forecast.

by Calculated Risk on 7/30/2025 08:37:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 230 thousand from 221 thousand last week.

• Also at 8:30 AM, Personal Income and Outlays, June 2025. The consensus is for a 0.3% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.3%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.7% YoY.

• At 9:45 AM, Chicago Purchasing Managers Index for July.

by Calculated Risk on 7/30/2025 03:36:00 PM

From the Las Vegas Visitor Authority: June 2025 Las Vegas Visitor Statistics

Reflecting the broader backdrop of persistent economic uncertainty and weaker consumer confidence, compounded by a slower convention month, the destination saw a ‐11% YoY decline in visitation, hosting approximately 3.1M visitors.

Convention attendance was approx. 375k for the month (down ‐10.7%), reflecting in part out rotations of shows that were held elsewhere this year, including InfoComm (30k attendees) and Cisco Live (18k attendees).

Hotel occupancy of 78.7% (down ‐6.5 pts) and ADR of $164 (‐6.6% YoY) translated to monthly RevPAR below $129 (‐13.8% YoY).
emphasis added

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (Black), 2020 (dark blue), 2021 (light blue), 2022 (light orange), 2023 (orange), 2024 (dark orange) and 2025 (red).

Visitor traffic was down 11.3% compared to last June.  Visitor traffic was down 14.2% compared to June 2019.

Year-to-date (YTD) visitor traffic is down 7.5% compared to the same period in 2019.

The second graph shows convention traffic.

Convention traffic was down 10.7% compared to June 2024 and down 27.1% compared to June 2019.  

YTD convention traffic is down 8.8% compared to 2019.

by Calculated Risk on 7/30/2025 02:00:00 PM

Fed Chair Powell press conference video here or on YouTube here, starting at 2:30 PM ET.

FOMC Statement:

Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year. The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Jeffrey R. Schmid. Voting against this action were Michelle W. Bowman and Christopher J. Waller, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. Absent and not voting was Adriana D. Kugler.
emphasis added

by Calculated Risk on 7/30/2025 11:13:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Inflation Adjusted House Prices 2.0% Below 2022 Peak

Excerpt:

It has been 19 years since the housing bubble peak, ancient history for many readers!

In the May Case-Shiller house price index released yesterday, the seasonally adjusted National Index (SA), was reported as being 77% above the bubble peak in 2006. However, in real terms, the National index (SA) is about 10.5% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 1.9% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the price would be $442,000 today adjusted for inflation (47% increase). That is why the second graph below is important - this shows "real" prices.

The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. The last graph shows the 5-year real return based on the Case-Shiller National Index.
...
The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).

In real terms (using CPI), the National index is 2.0% below the recent peak, and the Composite 20 index is 2.2% below the recent peak in 2022.

Both the real National index and the Comp-20 index decreased in May.

It has now been 36 months since the real peak in house prices. Typically, after a sharp increase in prices, it takes a number of years for real prices to reach new highs (see House Prices: 7 Years in Purgatory)

There is much more in the article!