The employment picture may not be as good as the Fed would like it to be.

• After many months of consistent employment growth, the June employment report released on Thursday was not as strong as anticipated.
• This could put more pressure on the Fed to delay raising interest rates.
• The International Monetary Fund has been very vocal in recent weeks urging the Fed not to increase rates for at least the remainder of the year.

Lately drops in unemployment were attributed to significant hiring.

• The unemployment rate on a national level declined from 5.5 percent down to 5.3 percent.
• This month’s decline is primarily related to once again people not looking for jobs. The increase of 223,000 jobs for the month of July was below most analysts’ expectations and significantly lower than May’s 280,000 increase.
• Some experts attribute the decline in hiring to be more related to the end of the school year.

Real Estate & Market Report

Momentum in the housing market is continuing at a strong pace.

• The pending home sales index rose 0.9 percent for the month of May. This was better than market expectations of 0.6 percent.
• The index is at the highest point since prior to the real estate bubble days of 2006 and the trend is expected to continue.
• This report continues the strong momentum we saw in last week’s existing home sales report.
• The West has been leading the way in sales were pending home sales rose 2.2 percent in May for a 13.0 percent year-on-year gain. Pending sales in the South are up 10.6 percent from the same time last year and remain strong even though the most recent report shows a decline of 0.8 percent.
• The Midwest also declined by 0.6 percent but remains ahead of last year by 7.8 percent. The Northeast rose sharply where housing is bouncing back strongly from the harsh winter. Sales were up 6.3 percent in this report and higher by 10.6 percent from a year ago.

Home price appreciation seems to be slowing despite high demand.

• The Case-Shiller Home Price Index showed an increase of only 0.3 percent for the month of April. Many analysts were expecting the number to be better.
• Home prices overall from the same time last year are up 4.9 percent.

On a more positive note construction spending jumped 0.8 percent for May greatly exceeding Econoday expectations of only 0.5 percent.

• The bulk of the growth however was not in residential construction.
• Month to month the location in which construction spending is focused varies so the fact that this report does not show residential homes as the primary area of spending is not alarming at this time.

In a positive sign for the economic future consumer sentiment has risen to the strongest level of the recovery.

• Typically stronger sentiment leads to more spending which leads to stronger economic growth.

Next week’s potential market moving reports:

• Monday July 6th – ISM Non-Mfg Index
• Wednesday July 8th – MBA Applications and FOMC Minutes Release
• Thursday July 9th – First Time Jobless Claims