US Housing Starts Plummet to 5-Year Low; Jobless Claims Remain Elevated

Housing Market Weakness

• 🏠 Housing starts for May came in significantly below expectations at 1,256,000 annualized units, the lowest figure since May 2020.
• 📉 Building permits, while also light, were not as severely impacted, with 1,393,000 annualized units, the lowest since June 2020.
• ⚠️ The decline in single-family starts is attributed to rising inventories of new homes and warnings about a potential glut.

Labor Market Indicators

• 📊 Initial jobless claims were reported at 245,000, meeting expectations and showing a slight decrease from the revised previous week.
• 📈 However, initial claims have been elevated for three consecutive weeks, hovering just below the 250,000 mark.
• 🔗 Continuing claims remain above 1.9 million for the fourth consecutive week, a level not seen since November 2021.

Interest Rates and Federal Reserve Policy

• 📈 Interest rates showed mixed movement, with the 10-year Treasury yield slightly higher and the 2-year yield down.
• 🏦 The Federal Reserve's stance on interest rates is a key focus, with the speaker suggesting the Fed appears unwilling to ease policy.
• 🧐 The speaker questions the logic of Fed officials' theories on how tariff discussions might influence expectations, finding it lacking in scrutiny.