Weekly Economic Update: July 21, 2025

The Markets (as of market close July 18, 2025)

Stocks opened last week mostly lower as traders digested mixed bank earnings and rising inflation data. Although June’s Consumer Price Index met expectations, rising costs for imported goods such as coffee, furniture, and appliances—possibly linked to increased tariffs—sparked some concern. Markets turned positive toward the end of the week on the back of strong corporate earnings and an encouraging retail sales report. Traders also kept a close eye on the White House’s push for higher tariffs on the European Union. Among the S&P sectors, utilities and information technology outperformed, while health care, materials, and energy lagged. Long-term bond yields held steady, crude oil prices dropped, the dollar gained for a second week, and gold declined for the first time in three weeks.

 

Last Week’s Economic News

 

  • Inflation continued to edge higher, with the Consumer Price Index rising in June—the largest monthly gain since January. Year-over-year, consumer prices climbed 2.7%, driven largely by housing and energy costs.
  • Wholesale inflation was flat in June, following a 0.3% increase in May. Year-over-year, producer prices advanced 2.3%, with the cost of goods rising 1.7% and services up 2.7%. Import prices ticked up in June due to rising nonfuel costs, while export prices rose, marking the largest 12-month gain since January.
  • Retail sales increased in June and 3.9% over the past year. Online retail saw continued strength, and food service sales were up significantly year-over-year. Industrial production beat expectations with a 0.3% gain in June, while manufacturing output rose modestly and utilities jumped 2.8%.
  • In the housing sector, building permits were relatively flat in June, though single-family permits dropped 3.7%. Housing starts rose for the month but remained slightly below last year’s level. Completions, particularly for single-family homes, fell sharply.
  • Gasoline prices were mixed regionally but slightly higher overall, with the national average sitting at $3.13 per gallon. Prices remain over 35 cents lower than a year ago.
  • Weekly jobless claims declined by 7,000 to 221,000. Continuing claims held steady, and insured unemployment remained at 1.3%. Among the states, New Jersey and Rhode Island reported the highest insured unemployment rates.

Eye on the Week Ahead

This week’s focus will be on the housing sector, with June data on existing and new home sales expected. While existing home sales showed a slight uptick in May, new home sales fell significantly. Analysts will be watching to see if mortgage rates and supply constraints continue to weigh on the market.

Have a nice week!

Sincerely,

 

 

 

Robert G. Carpenter

President & CEO
Baltimore-Washington Financial Advisors