Weekly Economic Update: July 22, 2019

The Markets (as of market close July 19, 2019)

All major stock market indexes closed last week in the red. Energy stocks dropped, as oil prices fell. Stocks in communication services and transportation also declined, impacting the large-cap indexes. Comments from the Fed pointed to signs of economic slowing, and leaned toward a possible rate cut later this month. The small caps of the Russell 2000 dipped the most last week, followed by the S&P 500 and the Nasdaq, each of which fell more than 1.0%. The Global Dow and the Dow lost less than 1.0%. For the year, the tech stocks of the Nasdaq remain well in front, followed by the S&P 500 and the Dow, which have all gained over 15% from their 2018 closing values. Not surprising through all the recent short term decline in overall stocks, that gold continues to make a move upward.


  • June was a good month for sales at the retail level, as receipts were up over the previous month. For the last 12 months ended in June, retail sales are up 3.4%.Import prices dropped 0.9% in June, pulled down by falling fuel prices (-6.5%). This marks the first monthly decrease in import prices since December 2018. Over the last 12 months ended in June, import prices have plunged 2.0% — the largest 12-month drop since the index fell 2.2% from August 2015 to August 2016. Export prices for domestic goods and services sold to foreign buyers fell 0.7% in June, after decreasing 0.2% in May. Exports fell 1.6% for the year ended in June, the largest 12-month decline since the index decreased 2.4% from August 2015 to August 2016. Overall, this report further highlights the lack of inflationary pressures both here and globally.
  • Industrial production was unchanged in June, as increases for both manufacturing (+0.4%) and mining (+0.2%) were offset by a drop in utilities (-3.6%). For the second quarter as a whole, industrial production declined at an annual rate of 1.2%, its second consecutive quarterly decrease. Overall, total industrial production was 1.3% higher in June than it was a year earlier.
  • Judging by the dearth of applications for building permits and new residential construction, it doesn’t look like there will be a glut of new housing units on the market. Housing starts fell again last month, dropping 0.9% from May’s totals. On the plus side, single-family housing starts increased 3.5% in June. Building permits sank 6.1% in June and are down 6.6% from a year earlier. Housing completions also plummeted, decreasing 4.8% for the month and 3.7% below June 2018.


Quite a bit of economic information is out this week, including June’s housing figures, durable goods orders (which have been lagging), and the first report on the second-quarter gross domestic product. The economy grew at an annualized rate of 3.1% in the first quarter.

Stay cool!