The Week in Review

🗞️Hot off the press, last week's economic data included:

🏠New Single-Family Home Sales Increased by 10.6% in July.  This was the largest monthly increase in nearly two years and exceeded consensus expectations. Although this surge pushed sales to their highest level since May 2023, it's still roughly in line with pre-COVID levels from 2019. 

🏚️ Existing Home Sales Increased 1.3% in July.Meanwhile, existing home sales rose, breaking a five-month decline. However, they remain near the slowest pace seen since the aftermath of the 2008 Financial Crisis, as affordability continues to weigh on the housing market.

🤷🏽 On the employment front, the U.S. job market wasn't as robust as initially thought in 2023 and early 2024. A recent revision by the Bureau of Labor Statistics revealed that employers added 818,000 fewer jobs in the 12 months ending in March 2024 than previously reported. This revision brings the average monthly job growth down to 174,000, a significant drop from the originally reported 242,000. These adjustments highlight the inherent challenges in economic forecasting, as key statistics like employment and GDP are often subject to significant revisions long after their initial release. The details matter. Yet most economic statistics are published based on the presumption that some of the data is enough to predict all of it. Even after initial adjustments, there are revisions years later due to data that is deduced at first and replaced later with real figures. Yes, employment, along with GDP, is both closely watched and subject to significant revisions, which is not a great combination. 

📉 The Powell Pivot Part Two. All of which is the preface to the real news last week coming out of Jackson Hole, Wyoming. There, Jerome Powell said, in effect: “Rate cuts? Heck, yes!” And with a weaker labor market and softer inflation, the time sure seems right. But that estimate may also be subject to revision later…much, much later.