by Calculated Risk on 7/03/2025 11:39:00 AM

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $71.5 billion in May, up $11.3 billion from $60.3 billion in April, revised.

May exports were $279.0 billion, $11.6 billion less than April exports. May imports were $350.5 billion, $0.3 billion less than April imports.
emphasis added

Click on graph for larger image.

Exports and imports decreased in May.

Exports were up 5.3% year-over-year; imports were up 3.3% year-over-year.

Imports increased sharply earlier this year as importers rushed to beat tariffs.  

The second graph shows the U.S. trade deficit, with and without petroleum.

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.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China decreased to $13.9 billion from $23.7 billion a year ago.

by Calculated Risk on 7/03/2025 11:30:00 AM

The DOL reported:

In the week ending June 28, the advance figure for seasonally adjusted initial claims was 233,000, a decrease of 4,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 236,000 to 237,000. The 4-week moving average was 241,500, a decrease of 3,750 from the previous week's revised average. The previous week's average was revised up by 250 from 245,000 to 245,250.
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 241,500.

The previous week was revised up.

Weekly claims were lower than the consensus forecast.

by Calculated Risk on 7/03/2025 09:13:00 AM

The headline jobs number in the June employment report was above expectations and April and May payrolls were revised up by 16,000 combined.     The participation rate decreased, the employment population ratio was unchanged, and the unemployment rate was decreased to 4.1%.

NOTE: State and local government education hiring was reported at 63.5 thousand in June (seasonally adjusted).  On a Not Seasonally Adjusted (NSA) basis, 542.4 thousand education jobs lost.  This happens every June.   However, this year fewer jobs were lost than expected resulting in the large SA gain.  It is possible this is just a timing issue and more than expected educators will be let go in July.

Earlier: June Employment Report: 147 thousand Jobs, 4.1% 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 increased in June to 83.5% from 83.4% in May.

The 25 to 54 employment population ratio increased to 80.7% from 80.5% the previous month.

Both are down slightly 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 3.7% YoY in June.   

Part Time for Economic Reasons

From the BLS report:

"The number of people employed part time for economic reasons, at 4.5 million, changed little in June. 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 decreased in June to 4.47 million from 4.62 million in May.  This is above the pre-pandemic levels.

These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 7.7% from 7.8% 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 1.65 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.46 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 June 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).  

Headline Jobs, Top 10 Streaks
	Year Ended	Streak, Months
1	2020	113
2	Current, N/A	541
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 May employment report was above expectations and April and May payrolls were revised up by 16,000 combined.   The participation rate decreased, the employment population ratio was unchanged, and the unemployment rate was decreased to 4.1%.

This was a solid employment report; however, a surprising number of state and local education employees were hired in June (63.5 thousand).  

by Calculated Risk on 7/03/2025 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment increased by 147,000 in June, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in state government and health care. Federal government continued to lose jobs.
...
The change in total nonfarm payroll employment for April was revised up by 11,000, from +147,000 to +158,000, and the change for May was revised up by 5,000, from +139,000 to +144,000. With these revisions, employment in April and May combined is 16,000 higher than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 147 thousand in June.  Private payrolls increased by 74 thousand, and public payrolls increased 73 thousand (Federal payrolls decreased 7 thousand).

Payrolls for April and May were revised up by 16 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In June, the year-over-year change was 1.81 million jobs.  Employment was up solidly year-over-year.

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 62.3% in June, from 62.4% in May. This is the percentage of the working age population in the labor force.

The Employment-Population ratio was unchanged at 59.7% from 59.7% in May (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate was decreased to 4.1% in June from 4.2% in May.

This was above consensus expectations and April and May payrolls were revised up by 16,000 combined.  

I'll have more later ...

by Calculated Risk on 7/02/2025 08:11:00 PM

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

Thursday:
• At 8:30 AM ET, Employment Report for June.   The consensus is for 129,000 jobs added, and for the unemployment rate to be unchanged at 4.2%.

• Also at 8:30 AM, The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 239 thousand from 236 thousand last week.

• Also at 8:30 AM, Trade Balance report for May from the Census Bureau. The consensus is the trade deficit to be $69.8 billion.  The U.S. trade deficit was at $61.6 billion the previous month.

• At 10:00 AM, the ISM Services Index for June.   The consensus is for a reading of 50.8, up from 49.9.

• All US markets will close early at 1:00 PM ET in observance of Independence Day

by Calculated Risk on 7/02/2025 03:45:00 PM

On Thursday at 8:30 AM ET, the BLS will release the employment report for June. The consensus is for 129,000 jobs added, and for the unemployment rate to be unchanged at 4.2%. There were 139,000 jobs added in May, and the unemployment rate was at 4.2%.

From Goldman Sachs:

We do not place much weight on the ADP miss because of ADP’s limited correlation with BLS private payrolls over the last few years. We left our forecast for June nonfarm payroll growth unchanged at +85k ahead of tomorrow’s release. ... We expect payroll growth to slow from its 135k 3-month average because big data indicators were soft ... We forecast that the unemployment rate edged up to 4.3%—a low bar from an unrounded 4.24%—reflecting sequential increases in other measures of labor market slack.
emphasis added

From BofA:

June NFP are likely to rise by 95k. Although the initial claims increase in recent weeks can be attributed to seasonal volatility, continuing claims were also high during the survey week. We also see headwinds from weak college graduates hiring and summer job cuts for education & health workers. Additionally, leisure & hospitality job growth tends to slow in June when Memorial Day falls relatively earlier in the month in May (like this year). We expect the u-rate to rise a tenth to 4.3%.

• ADP Report: The ADP employment report showed 33,000 private sector jobs were lost in June.  This was well below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index was at 45.0%, down from 46.8% the previous month.   This would suggest jobs lost in manufacturing. The ADP report indicated 15,000 manufacturing jobs added in June.

The ISM® services employment index for June will be released tomorrow.

• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 246,000 in June compared to 226,000 in May.  This suggests layoffs in June were higher than in May.

• Strikes: The CES strike report shows 5,600 employees returned from strikes during the reference period in June. This will boost the headline jobs number a little.

• Conclusion: Over the last year, employment gains averaged 144 thousand per month - and that was probably the trend prior to policy changes.  However, my guess is we will start to see the impact of policy uncertainty - a little more hiring hesitancy - and I'll take the under for June.

by Calculated Risk on 7/02/2025 12:32:00 PM

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -0.7% Year-over-year ...

The national multifamily vacancy rate currently stands at 7%, the highest reading we've recorded in our index. We're past the peak of a multifamily construction surge, but the market is still absorbing all of the new units, and vacancies are still trending up.

Realtor.com: 22nd Consecutive Month with Year-over-year Decline in Rents

In May 2025, U.S. median rent posted its 22nd consecutive year-over-year decline, dropping 1.7% for 0-2 bedroom properties across the 50 largest metropolitan areas.

This is much more in the article.

by Calculated Risk on 7/02/2025 09:44:00 AM

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the June 2025 seasonally adjusted annual sales rate (SAAR) of 435 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 435 thousand SAAR in June, down from 450 thousand in May, and down 1.4% from 442 thousand SAAR in June 2024.

This is the lowest sales rate since January 2022.  

Year-to-date (NSA) sales are down 6.2%.

Usually, heavy truck sales decline sharply prior to a recession and sales were a little soft recently.  

by Calculated Risk on 7/02/2025 08:52:00 AM

The BEA reported this morning that light vehicle sales were at 15.34 million in June on a seasonally adjusted annual rate basis (SAAR).

This was down 1.7% from the sales rate in May, and up 2.3% from June 2024.

Note that sales in June 2024 were depressed by a cyberattack impacting dealers’ online systems. This makes the YoY comparison look better.

Click on graph for larger image.

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

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

Since then, sales have declined for two consecutive months.

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

Sales in June were below the consensus forecast of 15.5 million SAAR.

by Calculated Risk on 7/02/2025 08:46:00 AM

From ADP: ADP National Employment Report: Private Sector Employment Shed 33,000 Jobs in June; Annual Pay was Up 4.4%

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Dr. Nela Richardson, chief economist, ADP. “Still, the slowdown in hiring has yet to disrupt pay growth.”
emphasis added

This was well below the consensus forecast of 110,000 jobs added. The BLS report will be released Thursday, and the consensus is for 129,000 non-farm payroll jobs added in June.

by Calculated Risk on 7/02/2025 07:00:00 AM

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 27, 2025. Last week’s results included an adjustment for the Juneteenth holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 13 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week and was 40 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 10 percent compared with the previous week and was 16 percent higher than the same week one year ago.

“Mortgage rates were lower across all loan types last week, with the 30-year fixed rate declining to its lowest level since April at 6.79 percent. This decline prompted an increase in refinance applications, driven by a 10 percent increase in conventional applications and a 22 percent increase in VA refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As borrowers with larger loans tend to be more sensitive to rate changes, the average loan size for a refinance application increased to $313,700 after averaging less than $300,000 for the past six weeks. Purchase activity was essentially flat over the week, as overall uncertainty continues to hold homebuyers out of the market. However, purchase activity still remains 16 percent higher than last year’s pace.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.79 percent from 6.88 percent, with points decreasing to 0.62 from 0.63 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 16% year-over-year unadjusted. 

Red is a four-week average (blue is weekly).  

Purchase application activity is still depressed, but above the lows of October 2023 and is 10% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased but remained very low.

by Calculated Risk on 7/01/2025 08:43:00 PM

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

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

• At 8:15 AM, The ADP Employment Report for June. This report is for private payrolls only (no government). The consensus is for 110,000 payroll jobs added in June, up from 37,000 in May.

by Calculated Risk on 7/01/2025 04:39:00 PM

From Cotality (formerly CoreLogic): US home price insights — July 2025

Spring homebuying season continues to be defined by slower price growth and tepid home buying activity.

• Year-over-year price growth dipped to 1.8% in May 2025, down from 5% price growth last May and slowest since the winter of 2012.

• Seasonal increase in home prices continues to be weak, up 0.3% compared to the month before, and less than half of 0.8% increase typically seen between April and May

• In more affordable Midwestern markets, such as Indianapolis, Kansas City, and Knoxville, as well as markets surrounding New York metro, seasonal gains in May continued to outperform pre-pandemic trends

• Illinois, up 6.4% year-over-year entered the top 5 states with the highest home price growth, following Rhode Island, New Jersey, Wyoming and Connecticut which all continue to record more than triple the national rate of price growth

• Florida, Texas, Hawaii, and Washington D.C. reported negative home price growth.
emphasis added

House prices are under pressure with more inventory and sluggish sales.

by Calculated Risk on 7/01/2025 02:46:00 PM

From the Census Bureau reported that overall construction spending decreased:

Construction spending during May 2025 was estimated at a seasonally adjusted annual rate of $2,138.2 billion, 0.3 percent below the revised April estimate of $2,145.5 billion. The May figure is 3.5 percent below the May 2024 estimate of $2,215.4 billion.
emphasis added

Private spending decreased and public spending increased slightly:

Spending on private construction was at a seasonally adjusted annual rate of $1,626.6 billion, 0.5 percent below the revised April estimate of $1,634.2 billion. ...

In May, the estimated seasonally adjusted annual rate of public construction spending was $511.6 billion, 0.1 percent above the revised April estimate of $511.3 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 9.2% below the peak in 2022.

Private non-residential (blue) spending is 6.8% below the peak in December 2023.

Public construction spending (orange) is slightly below the peak of October 2024.

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

On a year-over-year basis, private residential construction spending is down 6.7%. Private non-residential spending is down 3.9% year-over-year. Public spending is up 3.3% year-over-year.

This was below consensus expectations and spending for the previous two months were revised down.

by Calculated Risk on 7/01/2025 11:45:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Fannie and Freddie: Single Family Serious Delinquency Rates Decreased in May

Excerpt:

Freddie Mac reported that the Single-Family serious delinquency rate in May was 0.55%, down from 0.57% April. Freddie's rate is up year-over-year from 0.49% in May 2024, however, this is below the pre-pandemic level of 0.60%.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

Fannie Mae reported that the Single-Family serious delinquency rate in May was 0.53%, down from 0.55% in April. The serious delinquency rate is up year-over-year from 0.48% in May 2024, however, this is below the pre-pandemic lows of 0.65%.

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

There is much more in the article.

by Calculated Risk on 7/01/2025 10:10:00 AM

From the BLS: Job Openings and Labor Turnover Summary

The number of job openings was little changed at 7.8 million in May, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were little changed at 5.5 million and 5.2 million, respectively. Within separations, quits (3.3 million) and layoffs and discharges (1.6 million) changed little.
emphasis added

The following graph shows job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for May; the employment report this Friday will be for June.

Click on graph for larger image.

Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

The spike in layoffs and discharges in March 2020 is labeled, but off the chart to better show the usual data.

Jobs openings increased in May to 7.77 million from 7.40 million in April.

The number of job openings (black) were down 2% year-over-year. 

Quits were down 2% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

by Calculated Risk on 7/01/2025 10:00:00 AM

(Posted with permission). The ISM manufacturing index indicated expansion. The PMI® was at 49.0% in June, up from 48.5% in May. The employment index was at 45.0%, down from 46.8% the previous month, and the new orders index was at 46.2%, down from 47.6%.

From ISM: Manufacturing PMI® at 49% June 2025 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 49 percent in June, a 0.5-percentage point increase compared to the 48.5 percent recorded in May. The overall economy continued in expansion for the 62nd 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 fifth month in a row following a three-month period of expansion; the figure of 46.4 percent is 1.2 percentage points lower than the 47.6 percent recorded in May. The June reading of the Production Index (50.3 percent) is 4.9 percentage points higher than May’s figure of 45.4, returning the index to expansion territory. The Prices Index remained in expansion (or ‘increasing’) territory, registering 69.7 percent, up 0.3 percentage point compared to the reading of 69.4 percent reported in May. The Backlog of Orders Index registered 44.3 percent, down 2.8 percentage points compared to the 47.1 percent recorded in May. The Employment Index registered 45 percent, down 1.8 percentage points from May’s figure of 46.8 percent.

“The Supplier Deliveries Index indicated slower delivery performance, though the pace picked up somewhat: The reading of 54.2 percent is down 1.9 percentage points from the 56.1 percent recorded in May. (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 49.2 percent, up 2.5 percentage points compared to May’s reading of 46.7 percent.

“The New Export Orders Index reading of 46.3 percent is 6.2 percentage points higher than the reading of 40.1 percent registered in May. The Imports Index gained back its loss from the previous month, registering 47.4 percent, 7.5 percentage points higher than May’s reading of 39.9 percent.”
emphasis added

This suggests manufacturing contracted in June.  This was slightly above the consensus forecast. New export orders were still weak; employment was weak and prices very strong.

by Calculated Risk on 6/30/2025 08:16:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Take Another Step Toward April Lows

April 3rd and 4th saw the average top tier 30yr fixed mortgage rates well into the "mid 6's." Many lenders were able to quote 6.5% at the time. Just a few days ago, we noted there was still a ways to go before breaking below those early April levels, but the past few days have taken us within striking distance. [30 year fixed 6.67%]
emphasis added

Tuesday:
• At 9:30 AM ET, Discussion, Fed Chair Jerome Powell, Policy Panel Discussion, At the European Central Bank Forum on Central Banking 2025, Sintra, Portugal

• At 10:00 AM, ISM Manufacturing Index for June. The consensus is for the ISM to be at 48.8, up from 48.5 in May. 

• At 10:00 AM, Construction Spending for May. The consensus is for a 0.1% decrease in construction spending.

• At 10:00 AM, Job Openings and Labor Turnover Survey for May from the BLS.

• Late in the day, Light vehicle sales for June. The consensus is for light vehicle sales to be 15.5 million SAAR in June, down from 15.6 million in May (Seasonally Adjusted Annual Rate).

by Calculated Risk on 6/30/2025 04:20:00 PM

Today President Trump put out a note urging Fed Chair Powell to lower rates.

The following image, courtesy of Conor Sen, shows the central bank rates around the world. Mr. Trump wrote:

Jerome, You are, as usual, "Too Late". You have cost the USA a fortune - and continue to do so - you should lower the rate - by a lot! Hundreds of billions of dollars being lost! No Inflation.

Mr. Trump also wrote "Should be here" and referenced rates between 0.25% and 1.75%.  The current Fed's Fund rate is between 4.25% and 4.5%.   Fed Chair Powell is probably correct about rates currently being "modestly" restrictive, but it is possible we are neutral now.

First, there is some inflation.  The current rate of core PCE inflation was at 2.7% year-over-year in May, up from 2.5% in April. Core PCE inflation has slowed to 1.7% annualized over the last 3 months. Add in a 1.75% real rate - and you get close to the current Fed Funds rate.

It is difficult to predict what will happen over the next year.  There is considerable uncertainty about the impact of policy on inflation and the economy in coming months.

 

Click on graph for larger image.

Goldman Sachs economists noted today:

"We are pulling forward our forecast for the next cut to September. We had previously expected a cut in December because we thought that the peak summer tariff effects on monthly inflation would make it awkward to cut sooner. But the very early evidence suggests that the tariff effects look a bit smaller than we expected, other disinflationary forces have been stronger, and we suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect. And while the labor market still looks healthy, it has become hard to find a job, and both residual seasonality and immigration policy changes pose near-term downside risk to payrolls."

Maybe the impact on inflation from the tariffs will be less than expected. And it seems likely the impact will be mostly transitory.

It is also possible the economic weakness from policy (immigration, fiscal) will more than offset any boost to inflation from the tariffs.  Although immigration policy might push up inflation for food, etc.  It is very uncertain right now. 

It appears that currently Fed Funds policy is reasonably appropriate.

by Calculated Risk on 6/30/2025 01:16:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Declined in May; Up 2.2% Year-over-year

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) decreased -0.23% month-over-month (MoM) on a seasonally adjusted (SA) basis in May. On a year-over-year (YoY) basis, the National FMHPI was up 2.2% in May, down from up 2.6% YoY in April. 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 May, 31 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-4.7), Colorado (-3.1%), Idaho (-3.0%), Texas (-2.7%), and Florida (-2.2%).

For cities (Core-based Statistical Areas, CBSA), 257 of the 384 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Austin continues to be the worst performing city. However, 4 of the 6 cities with the largest price declines are in Florida. Cities in Florida (10) and Texas (7) dominate this list.

There is much more in the article!