MetroIntelligence Economic Update by P. DUFFY
Leading Economic Index falls for the fourth consecutive month
The Conference Board Leading Economic Index® (LEI) for the U.S. decreased by 0.8 percent in June 2022 to 117.1 (2016=100), after declining by 0.6 percent in May. The LEI was down by 1.8 percent over the first half of 2022, a reversal from its 3.3 percent growth over the second half of 2021. Consumer pessimism about future business conditions, moderating labor market conditions, falling stock prices, and weaker manufacturing new orders drove the LEI’s decline in June. The coincident economic index which rose in June suggests the economy grew through the second quarter. However, the forward-looking LEI points to a US economic downturn ahead.
Unemployment claims continuing to creep up
In the week ending July 16, initial unemployment claims were 251,000, an increase of 7,000 from the previous week’s unrevised level of 244,000. Continued claims during the week ending July 9 were 1,384,000, an increase of 51,000 from the previous week’s revised level. The advance unadjusted level of insured unemployment in state programs totaled 1,450,919, an increase of 122,364 (or 9.2 percent) from the preceding week. The seasonal factors had expected an increase of 67,960 (or 5.1 percent) from the previous week.
Pending new home sales fall 0.2 percent in June and 7.5 percent year-on-year
The New Home PSI came in at 125.5 for June, representing a 7.5% decrease from June 2021. The index is 27.9% below cycle highs. On a month-over-month basis, seasonally adjusted new home sales fell from May to June, down 0.2%, posting the fifth consecutive month-over-month decline. The combined impact of limited supply and rising rates continues to be felt in the market as new home volume fell to the lowest level since May 2020.