WASHINGTON – A raft of economic news Thursday sketched a picture of a weakening U.S. economy held back by sluggish home buying and factory production.
Americans bought fewer homes in June than in May. Manufacturing in the Federal Reserves Philadelphia region contracted for a third straight month this month. And a gauge of future U.S. economic activity fell in June.
The number of Americans seeking unemployment benefits rose 34,000 last week. Normally, that would signal an increase in layoffs. But the figure was skewed higher by seasonal factors that made it hard to tell whether the job market might be worsening.
The government tries to adjust its unemployment benefits data to reflect temporary summertime layoffs in the auto industry. But this year, many automakers skipped those shutdowns to keep up with demand. That led to fewer layoffs, which the Labor Department didnt anticipate.
After those statistical distortions fade, Joshua Shapiro, chief U.S. economist at MFR Inc., wrote, we suspect that the data will point to a soggy labor market.
Job growth slowed to 75,000 a month from April through June, down from healthy 226,000 pace in the first three months of the year. Unemployment is stuck at 8.2 percent.
The few pieces of good economic news lately have been confined mainly to housing. On Wednesday, for example, the government said builders broke ground last month on the most homes in nearly four years. Builder confidence has also risen. And average rates on fixed mortgages fell this week to record lows, mortgage buyer Freddie Mac said Thursday.
The average rate on 30-year loans fell to 3.53 percent, the lowest since long-term mortgages began in the 1950s.
But the National Association of Realtors said Thursday that sales of previously occupied homes fell 5.4 percent from May to June to a seasonally adjusted annual rate of 4.37 million homes. That was the fewest since October.
Compared with a year ago, sales are up 4.5 percent. But the annual sales pace is well below the 6 million that economists consider healthy.
Measures of the overall economy, though, suggest the recovery may be in danger of stalling. The Conference Boards index of leading economic indicators slipped in June.
The index fell 0.3 percent after a 0.4 percent increase in May. It had dropped 0.1 percent in April, its first decline in seven months.
Six of the 10 components of the boards index fell last month. The biggest driver was an index of new orders.