Back down from already depressed levels even as mortgage rates fall:

US New Home Sales Fall Unexpectedly

Sales of new single-family houses in the US dropped 7.8% from the previous month to a seasonally adjusted annual rate of 626 thousand in May, compared to market expectations of a 1.9% increase, as purchases plunged in the West and Northeast. It was the lowest sales since December despite lower mortgage rates and solid job market.

US Home Price Growth Eases to 7-Year Low: Case-Shiller

The S&P CoreLogic Case-Shiller 20-city home price index in the US rose 2.5 percent year-on-year in April 2019, easing from a revised 2.6 percent increase in the previous month and missing market expectations of 2.6 percent. It was the smallest annual gain in house prices since August 2012. Las Vegas recorded the biggest increase in home prices (7.1 percent), followed by Phoenix (6.0 percent) and Tampa (5.6 percent), while the smallest gains were reported in San Diego (0.8 percent), Los Angeles (1.5 percent) and San Francisco (1.8 percent). Prices in Seattle were unchanged. The national index, covering all nine US census divisions, went up 3.5 percent in April, down from a 3.7 percent rise in the prior month.

Richmond Fed report:

Fifth District Manufacturing Activity Below Forecasts

The Manufacturing Activity Index in the US fifth district fell to 3 in June 2019 from 5 in May, below market consensus of 7. Employment (2 from 17 in May), raw materials (27 from 37) and finished goods (21 from 26) dropped. Meanwhile, shipments (7 from 2) and new orders (1 from 0) improved. On the price front, price pressures eased for prices paid (1.58 from 2.21) while accelerated for prices received (1.68 from 1.53). Firms were optimistic about growth in the coming months.

Consumer confidence drops more than expected, reaching its lowest point in nearly two years

Tariffs:

Bank lending deceleration:

Real estate has gone nowhere:

Gone flat this entire cycle:

Last month’s uptick hinted at a reversal, but this month’s large move back down says otherwise:

Still rolling over, and from depressed levels relative to prior cycles, and these charts are not population adjusted which only makes it worse:

Last months spike up that was hailed as a turn around now looks like an aberration:

NY Manufacturing Falls The Most on Record

The New York Empire State Manufacturing Index plummeted 26.4 points from the previous month to -8.6 in June, missing market expectations of +10. That was the largest monthly decline on record, due to drop in both new orders and employment, while shipments increased at a slower pace.

The Trump tax cuts gave a one time boost to earnings, and now the tariffs are working against earnings:

Imports and exports both decelerating:

Still in contraction:

Trump says ‘devalued’ currencies put US at a disadvantage and the Fed doesn’t have a ‘clue’

President Donald Trump said Tuesday the U.S. dollar is at a disadvantage compared to other major currencies like the euro as other central banks keep interest rates low while the Federal Reserve’s rates are higher by comparison.

“The Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage,” Trump tweeted, adding the Fed doesn’t have “a clue.”

Trump also said in a separate tweet the U.S. has low inflation, calling it “a beautiful thing.”

Seems the President like tariffs because they are very profitable for the Treasury:

“We can always go back to our previous, very profitable position on tariffs — but I don’t believe that will be necessary,” the president said in a Twitter post Sunday.

The deal to avert tariffs that President Trump announced Friday with great fanfare consists largely of actions that Mexico had already promised to take, officials from both countries said.

Now even the lagging indicators are pointing south. And lower rates from the Fed will only make it a bit worse by cutting gov. interest payments to the economy:

Highlights

Move up the rate-cut plans is the theme of the May employment report which shows declining growth in the labor market and topping pressure for wages. Nonfarm payrolls, at 75,000, came in below Econoday’s consensus range and include a total of 75,000 in downward revisions to April and March.

Data on wage inflation are at the bottom of the consensus ranges — only a 0.2 percent monthly increase for average hourly earnings and, in the lowest reading since last September, a slumping 3.1 percent gain for the year-on-year rate.

The unemployment rate remains very low, unchanged at a lower-than-expected 3.6 percent with the pool of available workers low and holding steady at 10.9 million. Subdued wage gains won’t help to pull up the participation rate which is also unchanged at 62.8 percent.

And subdued gains show themselves in the payroll breakdown headlined by a soft 3,000 rise for manufacturing. Construction payrolls rose only 4,000 which contrasts sharply with 30,000 and 15,000 gains in the prior two months while government payrolls, after April’s 19,000 jump, fell 15,000 in today’s report. Retail, where traditional stores keep closing, extended its long stretch of declines with an 8,000 payroll contraction. Yet professional business services continue to post increases, up a solid 33,000 to suggest that businesses, trying to meet demand and having difficulty finding the right people, are turning to contractors to fill slots.

For the Federal Reserve, open talk of a near-term rate cut is likely to pick up force at the mid-month FOMC. Against a backdrop of soft inflation, stalling employment growth at a time of trade risks and also Brexit risks point to the need, at least for the doves, for policy insurance.

Trump’s Tariffs Have Already Wiped Out Tax Bill Savings for Average Americans

German industrial production plunged 1.9 percent from a month earlier in April 2019, much worse than market expectations of a 0.4 percent fall and after a 0.5 percent gain in the previous month. That was the biggest drop in output since August 2015, amid falls in the production of capital goods (-3.3 percent), intermediate goods (-2.1 percent), energy (-1.1 percent) and consumer goods (-0.8 percent). Meanwhile, construction output increased 0.2 percent. Year-on-year, industrial production dropped 1.8 percent in April, following a 0.9 percent fall in March.