Consumer spending rose slightly in June, but there was little sign of inflation as personal consumption expenditures barely moved. No inflation is good for rates. The already strong labor market continues to tighten, with fewer jobless claims and layoffs last week. Claims have now been below 300,000 for 126 weeks. Construction spending fell unexpectedly in June, mainly due to a drop in public projects. Private residential construction was down only 0.2% in June.
Mortgage applications fell slightly this week, down 2.8%. However, purchase applications were 9% higher than the same week a year ago. Pending home sales were up in June, after 3 straight monthly declines. NAR’s Pending Home Sales Index jumped 1.5%, double economists’ expectations. The housing market remains constrained by a shortage of properties for sale. Homebuilders struggle to fill the gap, citing higher costs and labor shortages.