Another busy day of economic data; let’s talk about it. 💬
First up was existing home sales, which fell for the sixth straight month to the lowest level since May 2020. They fell 5.9% MoM and a whopping 20.2% YoY. 😬
The weakness more or less confirms yesterday’s data which showed new home sales fell 9.6% MoM and 8.1% YoY. Despite mortgage rates pulling back slightly, prices of new and existing homes remain elevated, pricing many out of the market. 🏘️
In other news, the Philadelphia Fed Index rose unexpectedly in August, as volatility in this data type continues. Given these are regional surveys, it’s been hard to get a clear read on manufacturing activity which had been showing signs of softening lately. 🏭
On the positive side, the report’s inflation component showed that the extreme input prices are beginning to moderate. 👍
Overseas we received Eurozone inflation numbers for July. The headline reading came in at 8.9% YoY, a new record, and its core reading came in at 5.1%. The ECB began its tightening cycle last month but still has a long way to go before inflation is back down towards its 2% long-run target.
Finally, in other central bank news, Norway hiked rates by another 50 bps. Meanwhile, Turkey surprised the world with a rate cut (from 14% to 13%) despite inflation nearing 80% in the country and other global banks continuing their tightening efforts. 😮
Overall, the battle against inflation continues around the globe. As we’ve discussed in this newsletter, many structural issues are at play here, which suggests the struggle between central banks and price stability will be long. 😫