Read the highlights of this week’s commentary from Helios:
- Retail sales fell 0.9% in May 2025, mainly due to a drop in auto and appliance purchases after a pre-tariff buying spree. E-commerce, clothing, hobby, and miscellaneous retailers showed strength, offsetting weaknesses elsewhere. Consumers are spending less on big-ticket items but continue to buy everyday goods, signaling growing price sensitivity and potential challenges for durable goods and housing sectors.
- Housing construction slowed sharply in May, falling 9.8% to its weakest pace since early in the pandemic. A glut of completed homes, high mortgage rates, and fading buyer demand have left builders reluctant to launch new projects. Multifamily starts tumbled nearly 30%, while permits and builder sentiment slid further, signaling a housing market that’s losing steam as economic headwinds build.
- The Federal Reserve kept interest rates unchanged amid a split over whether to cut rates this year, with policy makers divided between no cuts and two. Updated forecasts show higher inflation and unemployment, with slower rate cuts expected through 2027. Chair Powell highlighted uncertainty about labor market strength and tariff-driven inflation as key to future policy decisions.
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