Today's data points to an economy that is holding up but careful, with consumers still spending, just more modestly.
Housing
US pending home sales fell 5.4% month over month. That badly missed the 0.5% drop that was expected, and it reversed the prior month's 3.8% gain. On a year-over-year basis the figure came to 2.3%. High prices and high mortgage rates keep pressing on the housing market.
Pending home sales count home contract signings, not closed deals. That makes them more forward-looking than actual sales by about 45 to 60 days. This drop was the biggest since December and the second biggest since April 2024, and it ended four straight months of gains. By region the picture is split: the Northeast and Midwest are doing better than the South and West.
Jobs and the Fed
A steadier labor market could give housing some help. Initial jobless claims fell 8,000 last week, which fits a low-hire, low-fire environment. This kind of data should let the Fed hold rates where they are for now, especially after cooler inflation numbers this week. That inflation reading pushed traders to cut their bets on a rate move at this month's meeting.
Tomorrow
The next session is packed. Several banks report, including regional names; big banks have already reported and looked good, so the question is whether that holds at the regional level. Netflix earnings are out and the stock is trading lower, so the earnings call and the market reaction to it are worth watching. Also due: import and export prices, industrial production, and University of Michigan consumer sentiment. That sentiment read matters given the retail sales and inflation data, since people's mood tends to track gas prices closely. China's World AI conference is also on the calendar, notable given the country's push for self-sufficiency, so Chinese stocks are worth watching.
