by Calculated Risk on 8/04/2025 10:35:00 AM

The BEA reported this morning that light vehicle sales were at 16.41 million in July on a seasonally adjusted annual rate basis (SAAR).

This was up 7.1% from the sales rate in June, and up 3.7% from July 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through July (red).

Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Then sales were depressed in May and June. 

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in July were at the consensus forecast of 16.4 million SAAR.

by Calculated Risk on 8/04/2025 08:11:00 AM

Altos reports that active single-family inventory was up 0.6% week-over-week.

Inventory is now up 38.6% from the seasonal bottom in January.   Usually, inventory is up about 22% from the seasonal low by this week in the year.   So, 2025 is seeing a larger than normal increase in inventory.

The first graph shows the seasonal pattern for active single-family inventory since 2015.

Click on graph for larger image.

The red line is for 2025.  The black line is for 2019.  

Inventory was up 26.6% compared to the same week in 2024 (last week it was up 27.0%), and down 10.0% compared to the same week in 2019 (last week it was down 10.3%). 

It now appears inventory will be close to 2019 levels towards the end of 2025.

This second inventory graph is courtesy of Altos Research.

As of August 1st, inventory was at 866 thousand (7-day average), compared to 860 thousand the prior week. 

Mike Simonsen discusses this data and much more regularly on YouTube

by Calculated Risk on 8/03/2025 06:14:00 PM

Weekend:
• Schedule for Week of August 3, 2025

Monday:
• At 2:00 PM ET, Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) for July.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are down 9 and DOW futures are down 43 (fair value).

Oil prices were up over the last week with WTI futures at $67.33 per barrel and Brent at $69.67 per barrel. A year ago, WTI was at $75, and Brent was at $78 - so WTI oil prices are down about 11% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.13 per gallon. A year ago, prices were at $3.46 per gallon, so gasoline prices are down $0.33 year-over-year.

by Calculated Risk on 8/03/2025 08:21:00 AM

IMPORTANT: It is critical that the Fed stay independent, data driven, and immune to political pressure. This is also true for the Federal statistical agencies, and the firing of the highly respected BLS commissioner on Friday (because of the bad employment report) is very concerning. The U.S. Senate must ensure that the next BLS commissioner is respected, data driven, and immune to political pressure.

On Friday, Fed Governor Adriana Kugler resigned. This created some concern that she was leaving early and creating a vacancy at a crucial time at the Fed.  The Fed needs to be independent, data driven, and not subject to political whims.  

In the case of Dr. Kugler, she was appointed to an unexpired term, and her term was scheduled to end in January 2026 (just six months from now). It is likely she left a little early to be available at the start of a school year (she is a professor). So, this is not a big deal. She will miss four FOMC meetings: Sept, Oct, Dec and Jan 2026.

FOMC Composition

The Federal Open Market Committee (FOMC) is composed of seven Fed Governors, the President of the NY Fed, and four rotating Federal Reserve Bank district Presidents (there are 12 Fed Districts).

Fed Governors

The Fed Governers are appointed to 14-year terms (every 2 years a term expires). If a Fed Governor leaves early, the President can appoint someone to fill the unexpired term.

This means each President appoints 2 governors and can also fill any unexpired terms.

The other Fed Governor whose term is scheduled to expire while Trump is President is Jerome Powell in January 2028. If he decides to leave early (likely), Trump can appoint someone to fill the unexpired term - and then appoint someone for 14 years in January 2028.  It is possible (but unlikely) that Powell will stay until 2028.

Here are the other five Fed Governors:

Christopher J. Waller, appointed by Trump, term expires January 2030

Michael S. Barr, appointed by Biden, term expires January 2032
Michelle W. Bowman, appointed by Trump, term expires January 2034
Philip N. Jefferson, appointed by Biden, term expires January 2036

Lisa D. Cook, appointed by Biden, term expires January 2038

Federal Reserve Bank Presidents on the FOMC

Fed District Presidents serve five-year terms and are appointed by the Directors of each Federal Reserve Bank. The current terms all end in January 2026, but frequently Fed Presidents are reappointed.

This year (2025) the five Fed Presidents on the FOMC are:

John C. Williams, New York, Vice Chair
Susan M. Collins, Boston
Austan D. Goolsbee, Chicago
Alberto G. Musalem, St. Louis
Jeffrey R. Schmid, Kansas City

Next year (2026), the Five Fed Presidents will be (it is likely most, if not all, will be reappointed in January):

John C. Williams, New York, Vice Chair
Beth M. Hammack, Cleveland
Neel Kashkari, Minneapolis
Lorie K. Logan, Dallas
Anna Paulson, Philadelphia

This is a qualified group. Even if Powell leaves, and four of the seven Fed Governors are Trump appointees, I think the majority of the FOMC will be very data dependent - and not swayed by politics.  And it is a COMMITEE vote!  There is the possibility we could see the first ever dissent by a Fed Chair.  

Note: The Fed Chair must be one of the Fed Governors. Trump could appoint someone to fill the last six months of Dr. Kugler's unexpired term and then appoint someone else in January that he intends to name Fed Chair.

by Calculated Risk on 8/02/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• Case-Shiller: National House Price Index Up 2.3% year-over-year in May

• Freddie Mac House Price Index Declined in June; Up 2.0% Year-over-year

• Inflation Adjusted House Prices 2.0% Below 2022 Peak

• Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in June

This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

by Calculated Risk on 8/02/2025 08:11:00 AM

This will be a light week for economic data.

The key report this week is the June Trade Deficit.

----- Monday, August 4th -----
2:00 PM: Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) for July.

----- Tuesday, August 5th -----
8:30 AM: Trade Balance report for June from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through the most recent report. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is the trade deficit to be $67.6 billion.  The U.S. trade deficit was at $71.5 Billion the previous month.

10:00 AM: the ISM Services Index for July.   The consensus is for a reading of 51.5, up from 50.8.

11:00 AM: NY Fed: Q2 Quarterly Report on Household Debt and Credit

----- Wednesday, August 6th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

----- Thursday, August 7th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 220 thousand from 218 thousand last week.

----- Friday, August 8th -----
No major economic releases scheduled.

by Calculated Risk on 8/01/2025 03:36:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For July, Realtor.com reported inventory was up 24.8% YoY, but still down 13.4% compared to the 2017 to 2019 same month levels. 

Here is their weekly report: Weekly Housing Trends: Latest Data as of July 26

• Active inventory climbed 23.7% year over year

The number of homes active on the market climbed 23.7% year over year, slightly lower than last week. This represents the 90th consecutive week of annual gains in inventory. There were more than 1.1 million homes for sale again last week, marking the 12th week in a row over the million-listing threshold and the highest inventory level since November 2019. Active inventory is growing significantly faster than new listings, an indication that more homes are sitting on the market for longer.

• New listings—a measure of sellers putting homes up for sale—rose 5.8% year over year

New listings rose again last week on an annual basis by 5.8% compared with the same period last year. This marks a slight slowdown from last week, in which new listings grew by 7.2% year over year, but is roughly in line with new listing growth throughout this June and July.

• The median list price was flat year over year

The median list price posted its first week without year-over-year growth (0%) since May. The median list price per square foot—which adjusts for changes in home size—rose 0.5% year over year and has not fallen in nearly two years, suggesting that the mix of homes for sale is starting to favor smaller and less expensive inventory.

With inventory climbing, and sales depressed, months-of-supply is at the highest level since 2016 putting downward pressure on house prices in an increasing number of areas.

by Calculated Risk on 8/01/2025 12:00:00 PM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during June 2025 was estimated at a seasonally adjusted annual rate of $2,136.2 billion, 0.4 percent below the revised May estimate of $2,143.9 billion. The June figure is 2.9 percent below the June 2024 estimate of $2,199.8 billion.
emphasis added

Private spending decreased and public spending increased slightly:

Spending on private construction was at a seasonally adjusted annual rate of $1,621.9 billion, 0.5 percent below the revised May estimate of $1,630.2 billion. ...

In June, the estimated seasonally adjusted annual rate of public construction spending was $514.3 billion, 0.1 percent above the revised May estimate of $513.7 billion.

Click on graph for larger image.

This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.

Private residential (red) spending is 9.7% below the peak in 2022.

Private non-residential (blue) spending is 6.6% below the peak in December 2023.

Public construction spending (orange) is at a new peak.

The second graph shows the year-over-year change in construction spending.

On a year-over-year basis, private residential construction spending is down 6.2%. Private non-residential spending is down 4.0% year-over-year. Public spending is up 5.2% year-over-year.

This was well below consensus expectations; however, spending for the previous two months was revised up slightly.

by Calculated Risk on 8/01/2025 10:16:00 AM

(Posted with permission). The ISM manufacturing index indicated contraction. The PMI® was at 48.0% in July, down from 49.0% in June. The employment index was at 43.4%, down from 45.0% the previous month, and the new orders index was at 47.1%, up from 46.4%.

From ISM: Manufacturing PMI® at 48% July 2025 Manufacturing ISM® Report On Business®

Economic activity in the manufacturing sector contracted in July for the fifth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:

“The Manufacturing PMI® registered 48 percent in July, a 1-percentage point decrease compared to the 49 percent recorded in June. The overall economy continued in expansion for the 63rd month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for the sixth month in a row following a three-month period of expansion; the figure of 47.1 percent is 0.7 percentage point higher than the 46.4 percent recorded in June. The July reading of the Production Index (51.4 percent) is 1.1 percentage points higher than June’s figure of 50.3 percent. The Prices Index remained in expansion (or ‘increasing’) territory, registering 64.8 percent, down 4.9 percentage points compared to the reading of 69.7 percent reported in June. The Backlog of Orders Index registered 46.8 percent, up 2.5 percentage points compared to the 44.3 percent recorded in June. The Employment Index registered 43.4 percent, down 1.6 percentage points from June’s figure of 45 percent.

“The Supplier Deliveries Index indicated faster delivery performance after seven consecutive months in expansion (or ‘slower’) territory. The reading of 49.3 percent is down 4.9 percentage points from the 54.2 percent recorded in June. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Inventories Index registered 48.9 percent, down 0.3 percentage point compared to June’s reading of 49.2 percent.

“The New Export Orders Index reading of 46.1 percent is 0.2 percentage point lower than the reading of 46.3 percent registered in June. The Imports Index registered 47.6 percent, 0.2 percentage point higher than June’s reading of 47.4 percent.”

Spence continues, “In July, U.S. manufacturing activity contracted at a faster rate, with declines in the Supplier Deliveries and Employment Indexes contributing as the biggest factors in the 1-percentage point loss of the Manufacturing PMI®.
emphasis added

This suggests manufacturing contracted in July.  This was below the consensus forecast of 49.8. New export orders were still weak; employment was weak and prices very strong.

by Calculated Risk on 8/01/2025 09:13:00 AM

The headline jobs number in the July employment report was below expectations and May and June payrolls were revised down by 258,000 combined.  A weak report. The participation rate and the employment population ratio decreased, and the unemployment rate was increased to 4.2%.

NOTE: Last month I noted that state and local government education hiring was up sharply - probably due to a data collection, timing or seasonal adjustment issue.   That increase was revised away for June. 

Earlier: July Employment Report: 73 thousand Jobs, 4.2% Unemployment Rate

Prime (25 to 54 Years Old) Participation

Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.

The 25 to 54 years old participation rate decreased in July to 83.4% from 83.5% in June.

The 25 to 54 employment population ratio decreased to 80.4% from 80.7% the previous month.

Both are down from the recent peaks, but still near the highest level this millennium.

Average Hourly Wages

The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).  

There was a huge increase at the beginning of the pandemic as lower paid employees were let go, and then the pandemic related spike reversed a year later.

Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 3.9% YoY in July, up from 3.8% YoY in June.

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons, at 4.7 million, changed little in July. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs."

The number of persons working part time for economic reasons increased in July to 4.68 million from 4.47 million in June.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.9% from 7.7% in the previous month. This is down from the record high in April 2020 of 22.9% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.6%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).

Unemployed over 26 Weeks

This graph shows the number of workers unemployed for 27 weeks or more.

According to the BLS, there are 1.83 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.65 million the previous month.

This is down from post-pandemic high of 4.171 million, and up from the recent low of 1.056 million.

This is above pre-pandemic levels.

Job Streak

Through July 2025, the employment report indicated positive job growth for 54 consecutive months, putting the current streak in 2nd place of the longest job streaks in US history (since 1939).

The streak barely survived the large downward revisions to May and June payrolls!  

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2020	113
2	Current, N/A	551
3	1990	48
4	2007	46
5	1979	45
6 tie	1943	33
6 tie	1986	33
6 tie	2000	33
9	1967	29
10	1995	25
1Currrent Streak

Summary:

The headline jobs number in the July employment report was below expectations and May and June payrolls were revised down by 258,000 combined.  The participation rate and the employment population ratio decreased, and the unemployment rate was increased to 4.2%.

This was a weak employment report.