The housing market is still gaining momentum, according to data released last week. Pending home sales were up 0.9 percent in May, exceeding the Econoday expectations for a 0.6 percent gain. The index level of 112.6 is as high as it's been since 2006.
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Regionally, pending home sales increased in the West with a 2.2 percent gain and a 13 percent year-over-year gain. The South is up 10.6 percent year-over-year but dipped 0.8 percent in May. Midwest sales also dipped in May, down 0.6 percent with a 7.8 percent year-over-year gain. The Northeast region bounced back strongly from a dismal winter with a 6.3 percent in May and a 10.6 percent year-over-year gain.
Consumer confidence continues as the index rose nearly 7 points to a 101.4 level, surpassing the Econoday high estimate of 99. The report showed consumers' plans for purchasing a home remain steady.
Job gains and wage growth did not meet forecasts. Economists predicted 230,000 jobs to be added in June, but employment data only showed growth of 223,000. Average hourly earnings were just 2 percent higher than a year ago, down from 2.3 percent last month. Stronger wage growth is normally apparent in an improving labor market.
Unemployment, though, is at its lowest level since April 2008, declining from 5.5 percent to 5.3 percent. This data though, was mostly due to a large number of people leaving the labor force.
Last week in the economy:
- Mortgage rates (the national average) fell 0.05% (5 basis points).
- The purchase index of MBA Mortgage Applications fell 4 percent in the June 26 week, though the trend remains positive with a 14 percent gain year-over-year. Refinancing applications fell 5 percent.
- Initial Jobless Claims dropped 0.2 percent, with initial claims at 281,000 in the June 27 week.
What's on the economic calendar for the week of July 6, 2015:
Monday: Gallup US Consumer Spending Measure will be updated.
Tuesday: JOLTS and Consumer Credit will be released.
Wednesday: MBA Mortgage Applications and FOMC minutes will be released.
Thursday: Jobless Claims will be updated.
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