Jobless Claims Rise, Housing Market Rebounding
Initial jobless claims rose to just over 1.4 million for the week ending July 18. Continuing claims fell to about 16.2 million. Initial claims edging higher suggests that the resurgence of COVID-19 may be taking a toll on the labor market recovery.
Record low mortgage rates have spurred a rebound in the housing market. Existing home sales jumped 20.7% and new home sales rose 13.8% during June. More improvement is on the way, as purchase mortgage applications continue to climb.
The Leading Economic Index (LEI) moderated slightly, but still increased 2.0%. Overall, the U.S. economic recovery continues, but the pace of improvement appears to be slowing.
COVID-19 Outbreak Set to Disrupt Q2 Global Activity
This week’s data releases offered more insight into the severity of the economic downturn resulting from the COVID-19 pandemic as well as subsequent lockdown and social distancing measures. South Korea—one of the first countries to release its Q2 GDP data—fell into recession with Q2 growth contracting 3.3% quarter-over-quarter.
As COVID-19 cases continue to surge in South Africa, the South African Reserve Bank (SARB) opted to cut its repo rate for the fifth time, reducing the key rate 25 bps to 3.50%. Elsewhere, Eurozone manufacturing and services PMIs recovered more than expected in July, moving back into expansionary territory.