Consumer Sales Up a Modest 0.2% in June… Forecasters expected retail sales to expand 0.5%.
What it means— Retail sales dropped at gas stations, which is good for consumers, but even without that, sales rose just 0.3%. Furniture stores and online retailers did well, while home centers and department stores dipped. Even bars and restaurants were mostly flat. Investors took the results as good news, because tepid sales should give the Federal Reserve more reason to sit on the sidelines after the July meeting.
June Housing Starts Fall 8% After Jumping 16% in May… Housing starts fell from an annualized pace of 1.56 million to 1.43 million.
What it means— After the huge gain in May, analysts expected housing starts to fall more than 9% in June, so the 8% drop beat expectations. If you average May and June, housing starts are up 8% since April, which is pretty good. The key is demand, which remains sky high because there are few existing homes for sale. Normally, new home sales account for 10% to 15% of sales. Today, that number is over 30%. First-time home buyers are desperate for new digs and appear to be getting comfortable with mortgage rates near 7%. This is good news for the few existing homeowners who want or need to sell, because it is keeping prices high making existing house prices competitive with new construction.
Initial Jobless Claims Fell 9,000 Last Week to 228,000… Continued claims walked up a bit, by 33,000, to 1.75 million.
What it means— Not much. We’ve kept reporting initial claims because the mainstream media has kept it on the front page, but nothing has happened in this measure for some time. Initial claims are well within reason for a solid but muted economy, and continued claims aren’t ringing any warning bells.
June Existing Home Sales Down 3.3%, Off 18.9% Over Last Year… Inventory fell 13.6% over last year, to just 1.08 million units.
What it means— As has been true for a year, it’s all about inventory. With so few homes for sale, buyers have had little choice and are paying up for what they find. The median existing home sale price was $410,200, down just 0.9% from last year and the second highest median sale price ever. As long as existing homeowners feel trapped in low-rate mortgages, thin inventory will be the thing.
Tesla Profit Rebounded Last Quarter, Up 20%… Tesla’s profit rose to $2.7 billion on cost reductions and higher sales, even as the company lowered prices.
What it means— Elon Musk is pushing for market share over profits but seems to be getting both. The company cut prices on several models and still rang the cash register, but the rest of the year might not be so rosy. Musk warned that production will suffer as the company updates its factories and that macroeconomic conditions likely will weigh a bit on sales. Even so, Tesla is operating in the black. The legacy carmakers in the U.S. lose money on their electric vehicle (EV) sales. If things get a bit tougher for Tesla, imagine how they will be for EV sales at GM and Ford.
Florida Bank Teller Foils Robbery by Telling Suspect To Take a Seat… In Hollywood, FL, 77-year-old James Kelly walked into a PNC Bank branch and handed the teller a note demanding money. The startled teller first handed Kelly a withdrawal slip. Kelly told her he didn’t want the slip; he was there to rob the place. The teller then feigned computer problems and asked Kelly to take a seat with the other customers. As Kelly complied, the teller alerted the local police, who entered through the back door and apprehended the suspect. Apparently, we’re so used to having to wait for customer service that even thieves think it’s normal. This story is eerily similar to a recent one about nail salon patrons ignoring a robber. See a trend?
Data supplied by HS Dent Research
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