Episode 49: The U.S. economy is balancing between growth and uncertainty. The labor market remains resilient but housing is sluggish and consumers are acting cautiously.
- Job growth exceeded expectations, with payrolls increasing by 139,000 employees in May. Healthcare and leisure sectors led job gains.
- Wages rose 0.4% in May and 3.9% year-over-year.
- Construction spending fell 0.4% in April, marking the first annual decline since the pandemic.
- Residential construction declined by 0.9%, and nonresidential fell by 0.5%.
- Public spending on infrastructure, particularly highways, provided some support.
- Pending home sales dropped 6.3% in April, with the West experiencing the sharpest decline.
- Home prices rose 3.4% year-over-year in March, with notable regional differences.
- Consumer spending increased just 0.2% in April, mainly driven by services.
- The personal saving rate climbed to 4.9%, signaling caution among households.
- Inflation remained mild, with the core index rising just 0.1% in April and 2.5% year-over-year.
- Tariff uncertainty is causing businesses to brace for possible price hikes.
- The University of Michigan’s Consumer Sentiment Index remained low, with nearly half of consumers worried about basic affordability.
- The Fed’s Beige Book reported slight declines in economic activity, softer hiring, and rising cost concerns.
- Unemployment claims ticked up, with initial claims hitting 247,000.
- Businesses across regions are showing hesitation in making major investment decisions.
For more information on the state of the U.S. Economy, including forecasts, watch all the episodes of the Economy Express series.
