Week of June 21, 2024 Weekly Recap & The Week Ahead
Do more of what works and less of what doesn’t.
1. US Retail Sales Stall, Showing Signs of Consumer Strain — Sales rose just 0.1% on the month, one-tenth of a percentage point below the Dow Jones estimate, according to a Commerce Department report Tuesday that is adjusted for seasonality but not inflation. However, the result was slightly better than the downwardly revised 0.2% decline in April.
On a year-over-year basis, sales rose 2.3%. The sales number was worse when excluding autos, with a decline of 0.1% against the estimate for a 0.2% increase. The report comes with investors on edge about the direction of the economy and what that will mean for the future of monetary policy at the Federal Reserve. Consumer spending is responsible for about two-thirds of all economic activity, so any weakness could signal a retrenchment in growth while also pushing the Fed to begin cutting interest rates.
2. Biden Gives Legal Status to Immigrant Spouses of U.S. Citizens — President Biden announced a new immigration program Tuesday that provides a path to citizenship for hundreds of thousands of immigrants in the country illegally who are married to U.S. citizens. Biden plans to promote the announcement at the White House alongside members of Congress, immigration advocates and U.S. citizens who, because of arcane immigration rules, haven’t been able to sponsor their spouses for green cards. The program has the potential to benefit immigrants who have been living in the country at least a decade, offering them work permits, deportation protections—and a route for them to apply for green cards, which is the pathway to citizenship.
3. New US Home Construction Plunges to Slowest Pace Since June 2020 — New home construction in the US slumped in May to the slowest pace in four years, as higher-for-longer interest rates sap the housing industry’s momentum from earlier this year. Housing starts decreased 5.5% to a 1.28 million annualized rate last month, according to government data released Thursday. The figure was below all but one estimate in a Bloomberg survey of economists.
Building permits, which point to future construction, fell 3.8% to a 1.39 million annual rate, also the weakest since June 2020. The declines in starts and permits were broad across multifamily and single-family units. Authorized permits for single-family homes dropped for a fourth straight month to the slowest pace in a year.
4. U.S. Business Activity Grows as Europe Recovery Slows — The S&P Global U.S. Composite Purchasing Managers Index—which gauges activity in the manufacturing and services sectors—rose to 54.6 in June from 54.5 in May, marking a 26-month high. A level over 50 indicates expansion in private-sector activity. S&P Global’s composite Purchasing Managers Index for the eurozone, a measure of activity in its services and manufacturing sectors, fell to 50.8 in June from 52.2 in May. A reading above 50.0 points to an increase in activity, while a reading below that threshold points to a decline.
The week ahead — Economic data from Econoday.com:
