The cost of consumer goods rose in June, driven by an increase in gas prices. The consumer price index ticked up .3%, as the cost of gasoline rose 3.4% after jumping 10.4% the month before. Food prices and housing costs also increased.
Housing starts jumped 9.8% in June to an annual pace of 1.17 million units, led by a 29.4% surge in multifamily construction. Permits for future building rose 7.4% to a 1.34 million unit rate, marking the highest in almost 8 years.
Also on a positive note, confidence among home builders held up at the highest level in almost a decade, with the National Association of Home Builders index holding at 60 in July. Measures of both current sales conditions and expectations for the next six months rose. While “we should expect a continued recovery of the housing market” heading into the second half of 2015, the report noted that “builders still face a number of challenges, including shortages of lots and labor”.
Small business optimism fell sharply in June, as the NFIB optimism index dropped to a reading of 94.1. Nine out of ten index components slipped, and one was unchanged from last month. While the reading “ is not a disaster or a signal of a looming recession, it is a disappointing sign that economic growth on Main Street is not set for a strong second half of growth. The weakness was substantial across the board, showing no signs of a growth spurt in the near future”, according to the NFIB.
Retail sales slid in June for the first time in four months, declining .3% as Americans cut back spending on cars, clothes and restaurants.
Business inventories rose a modest .3% in May, signaling that restocking might not contribute all that much to economic growth in the second quarter. Business sales rose .4%, and at the current sales pace it would take businesses 1.36 months to clear their shelves.