The Conference Board’s Leading Economic Index® experienced a 0.3% decline in June, following a revised flat growth in May. The index now stands at 98.8, reflecting a 2.8% drop over the first half of the year, which is a sharper decline compared to the 1.3% contraction in the second half of 2024. Lower consumer expectations and reduced new orders were the primary factors behind this downturn.
Existing home sales decreased by 2.7% in June, reaching a seasonally adjusted annual rate (SAAR) of 3.93 million. Inventories fell by 0.6% during the month but were up nearly 16% year-over-year. Sales remained flat compared to the previous year, with inventories representing a 4.7-month supply—the highest since 2016, excluding May 2020. The median sales price increased by 2.0% year-over-year to $435,300.
New home sales saw a slight increase of 0.6% in June after a decline in May, which had been the lowest rate since November 2024. The inventory of unsold homes rose, representing a 9.8-month supply at the current sales pace. Compared to the previous year, inventories were up by 8.5%, while sales were down by 6.6%. The median sales price fell by 2.9% year-over-year.
The AIA/Deltek Architecture Billings Index (ABI) indicated continued contraction in June, with a score of 46.8, down from 47.2 in May. A score below 50 signifies a contraction in billings, as more firms reported a decrease rather than an increase in activity. The ABI has been in negative territory since August 2023, excluding October 2024. Despite the decline in billings, inquiries into new projects increased for the second consecutive month.
Headline durable goods orders dropped by 9.3% in June, following a 16.5% rebound in May. The decline was largely driven by a sharp decrease in civilian aircraft orders, a notoriously volatile segment. Additional declines were observed in orders for computers and communications equipment. However, gains were seen in defense aircraft, metals, machinery, other electronic products (such as semiconductors), motor vehicles, and electrical equipment. Core business orders (nondefense capital goods, excluding aircraft) decreased by 0.7%, following a 2.0% gain in May. Compared to the previous year, core orders were up by 5.0%, while headline orders were up by 12.6%.
The U.S. economy continues to face high levels of uncertainty, with recession odds higher than at the beginning of the year. However, growth remains positive, albeit slowing. U.S. GDP is projected to grow by 1.5% in 2025 and 1.7% in 2026, slightly higher than the mid-year outlook. Consumer spending growth is expected to moderate to 1.9% in 2025 before easing further to 1.4% in 2026. Business investment growth is anticipated to slow to 1.8% in 2025 before declining further to 0.5% in 2026.
Industrial production is expected to grow by only 0.7% in 2025, led by a strong first quarter, and 0.3% in 2026. Certain industries will be more affected by tariffs than others. Auto and light truck sales rose to 15.8 million in 2024 but remain below trend. Vehicle sales are expected to decline slightly to 15.7 million in 2025 and further to 15.5 million in 2026 due to affordability constraints. Housing starts fell to 1.37 million in 2024 and are projected to ease further to 1.34 million in 2025, remaining weak at around 1.36 million in 2026.
The unemployment rate is expected to rise slightly from 4.0% in 2024 to an average of 4.2% through 2026. Consumer price growth is anticipated to ease to 2.9% in 2025 and further to 2.7% in 2026. Global GDP growth expectations have eased to 2.5% for 2025, with the 2026 forecast remaining stable at 2.7%. Global inflation is expected to moderate to 3.7% in 2025 and further to 3.2% in 2026. Global industrial production is projected to grow by 1.5% in 2025 and 2.0% in 2026, while world trade volumes are expected to expand at a slower pace, growing by only 0.6% in 2025 and 0.4% in 2026.
Chemical railcar loadings increased to 33,460 for the week ending July 19, reflecting a 1.1% year-over-year rise. U.S. natural gas futures declined as the front-month contract rolled to August, influenced by expectations for cooler weather next month. The combined oil and gas rig count rose by 7 to 539, marking the first gain in nearly three months.
— news from American Chemistry Council