Weekly Economic Recap 7.20 - 7.26

Labor Market: Payroll growth keeps slowing while jobless claims hit a near-60-year low, leaving a labor market that looks resilient on the surface but is quietly losing steam underneath.

ADP Employment Change showed the private sector added an average of just 16,500 jobs per week over the four weeks ending July 4, down from 19,250 the prior four weeks — the fourth consecutive drop and further confirmation of the slowdown flagged in ADP's June report. Jobless claims told a more mixed story: the 4-week average of continuing improvements fell to 207.5k (from 214.75k), with initial claims dropping 22k to 187k for the week of July 18 — well below the 212k estimate and the lowest print in nearly 60 years — while continuing claims edged down 2k to 1.796M. Taken together, the claims data reflects a still-resilient labor market, though that resilience carries the caveat of shrinking workforce participation and an immigration crackdown suppressing labor supply alongside demand.

Housing Market:  Mortgage rates climbed for a fourth straight week on renewed Mideast tensions, yet buyers pushed through anyway with applications up nearly 2%.

Rates moved in different directions depending on the source. MBA's 30-yr average rose 4bps to 6.69% for the week ending July 17 — the highest since August 2025 — continuing a run-up of 0.60 points since the US and Israel struck Iran in late February (rates had briefly dipped below 6%, to ~6.09%, before that). June's ceasefire talks had offered some relief, but renewed hostilities revived concerns the Fed will hold rates steady. Despite the higher rate, MBA applications rose 1.9% after two straight declines, with purchase applications up 5.5%. Freddie Mac's read was slightly different in level but same direction: 6.58% as of July 23, up from 6.55%, marking a fourth straight weekly increase — still below year-ago levels but higher than earlier in 2026.

Housing Supply & Sales:  Builders pulled back on permits but new home sales rebounded on price cuts and buydowns, showing demand is alive — just price-sensitive.

Building permits fell 2.6% MoM to a seasonally adjusted 1.374M in June (slightly above the preliminary 1.367M), with multifamily (5+ units) down 3.1% to 502k and single-family down 2.2% to 872k — the lowest single-family reading in 10 months, reinforcing the cooling-demand narrative driven by financing costs and affordability. New home sales bucked the trend, rising 1.6% MoM to a seasonally adjusted 628k, the first increase in three months following a revised 4.3% drop to 618k in May — likely driven by builder concessions, rate buydowns, and price cuts. Supply of new builds slipped 0.2% to 9.3 months at the current sales pace, and the median new-home price fell to $389,300 in June, down from $412k in May and $409,200 a year earlier.