by Calculated Risk on 7/05/2025 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

Click on graph for larger image.

• FHFA’s National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

• Freddie Mac House Price Index Declined in May; Up 2.2% Year-over-year

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

• Asking Rents Mostly Unchanged Year-over-year

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

by Calculated Risk on 7/05/2025 08:11:00 AM

This will be a very light week for economic data.

----- Monday, July 7th -----
No major economic releases scheduled.

----- Tuesday, July 8th -----
6:00 AM ET: NFIB Small Business Optimism Index for June.

----- Wednesday, July 9th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

2:00 PM: FOMC Minutes, Meeting of June 17-18

----- Thursday, July 10th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for initial claims to increase to 235 thousand from 233 thousand last week.

----- Friday, July 11th -----
No major economic releases scheduled.

by Calculated Risk on 7/04/2025 08:21:00 AM

From STR: U.S. hotel results for week ending 28 June

The U.S. hotel industry reported mostly negative year-over-year comparisons, according to CoStar’s latest data through 28 June. ...

22-28 June 2025 (percentage change from comparable week in 2024):

• Occupancy: 71.9% (-0.1%)
• Average daily rate (ADR): US$163.30 (0.0%)
• Revenue per available room (RevPAR): US$117.45 (-0.1%)
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 slightly behind both 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 increase further during the summer travel season; however, we will likely see some hit to occupancy during the summer months due to less international tourism.

by Calculated Risk on 7/03/2025 07:49:00 PM

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

There will be additional trade related distortions in Q2 boosting GDP.

From Goldman:

Following this morning’s data, we have lowered our Q2 GDP tracking estimate by 0.6pp to +3.0% (quarter-over-quarter annualized). Our Q2 domestic final sales estimate stands at +0.7%. [July 3rd estimate]
emphasis added

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.6 percent on July 3, up from 2.5 percent on July 1. After recent releases from the US Census Bureau, the US Bureau of Economic Analysis, the US Bureau of Labor Statistics, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth increased from 1.5 percent and -11.9 percent, respectively, to 1.6 percent and -11.7 percent, while the nowcast of second-quarter real government expenditures growth increased from 2.0 percent to 2.3 percent. [July 3rd estimate]

by Calculated Risk on 7/03/2025 03:47:00 PM

From the Association of American Railroads (AAR) AAR Data Center. Graph and excerpts reprinted with permission.

In recent months the U.S. economy has defied easy characterization, caught between signals of underlying strength and uncertainty regarding the road ahead. Rail freight volumes have followed that lead, reflecting a mix of cautious optimism and lingering hesitation across key sectors. The uncertainty characterizing both the economy and freight markets is likely to continue because key drivers of economic momentum— including the labor market, consumer spending, inflation levels, interest rates, and economic policies across the globe—remain fluid.
emphasis added

On intermodal:

U.S. rail intermodal originations fell 2.9% (31,000 containers and trailers) in June 2025 from June 2024, their first year-over-year decline in 22 months. June’s decline comes amid broader uncertainties impacting global supply chains that have tempered international shipments. In June 2025, U.S. rail intermodal volume averaged 260,834 units per week, below the 2016-2005 average for June of 263,991.

Meanwhile, total U.S. rail carloads (excluding intermodal) rose 2.1% (nearly 19,000 carloads) in June 2025 over June 2024, their fourth straight year-over-year increase— the first time that’s happened since late 2021. In June, 10 of the 20 carload categories tracked by the AAR had year over-year gains. Total U.S. rail carloads averaged 226,259 per week in June 2025, the most for June since 2021. In the 66 months since January 2020, only 14 months had a higher weekly average than June 2025 did.

by Calculated Risk on 7/03/2025 02:07:00 PM

(Posted with permission). The ISM® Services index was at 50.8%, up from 49.9% last month. The employment index decreased to 47.2%, from 50.7%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 50.8% June 2025 Services ISM® Report On Business®

Economic activity in the services sector grew in June after just one month of contraction, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® indicated expansion at 50.8 percent, above the 50-percent breakeven point for 11th time in the last 12 months.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In June, the Services PMI® registered 50.8 percent, 0.9 percentage point higher than the May figure of 49.9 percent. The Business Activity Index returned to expansion territory in June, registering 54.2 percent, 4.2 percentage points higher than the ‘unchanged’ reading of 50 percent recorded in May. This index has not been in contraction territory since May 2020. The New Orders Index returned to expansion territory in June, recording a reading of 51.3 percent, an increase of 4.9 percentage points from the May figure of 46.4 percent. The Employment Index returned to contraction territory for the third time in the last four months; the reading of 47.2 percent is 3.5 percentage points lower than the 50.7 percent recorded in May.

“The Supplier Deliveries Index registered 50.3 percent, 2.2 percentage points lower than the 52.5 percent recorded in May. This is the seventh consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (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 Prices Index registered 67.5 percent in June, a 1.2-percentage point decrease from May’s reading of 68.7 percent. The index has exceeded 60 percent for seven straight months, with the May and June readings the highest since November 2022 (69.4 percent).
emphasis added

This was at consensus expectations, but employment was weak and prices paid very high.

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 ...