6/30: MetroIntelligence Economic Update by P. DUFFY

May pending home sales jump 44.3 percent, but down 5.1 percent year-on-year

The Pending Home Sales Index rose 44.3 percent to 99.6 in May, chronicling the highest month-over-month gain in the index since NAR started this series in January 2001. Still, contract signings fell 5.1 percent year-on-year. An index of 100 is equal to the level of contract activity in 2001.



IMF lowers 2020 growth rate to -4.9 percent in June update

Global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentage points lower than in the pre-COVID-19 projections of January 2020.



June consumer sentiment slips to 78.1, still up 8.0 percent from May

Consumer sentiment slipped in the last half of June to 78.1, although it still recorded its second monthly gain over the April low. While most consumers believe that economic conditions could hardly worsen from the recent shutdown of the national economy, prospective growth in the economy is more closely tied to progress against the coronavirus. The early reopening of the economy has undoubtedly restored jobs and incomes, but it has come at the probable cost of an uptick in the spread of the virus. The need for new relief programs is urgent and would best be accomplished before the national elections dominate the debate.



May personal spending jumped 8.2 percent versus decline of 4.2 percent in personal income

In May, personal income fell 4.2 percent, disposable income (minus taxes) fell 4.9 percent while personal consumption expenditures (PCE) increased 8.2 percent, leading to a decline in the personal savings rate from over 32 percent to 23.2 percent.



PCE Price Index edged up 0.1 percent in May, up 0.5 percent year-on-year

The inflation tracker PCE price index increased 0.1 percent in May and 0.5 percent year-on-year. Excluding food and energy, the PCE price index increased 0.1 percent in May and 1.0 percent year-on-year.


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