Resilient Investment and Services Offset Housing Slowdown in U.S. Economy
The latest data from the Commerce Department, the Federal Housing Finance Agency, the Conference Board, and regional Federal Reserve banks shows an American economy that looks weaker on the surface but keeps performing better than forecasts.
Headline July figures showed durable goods orders fell 2.8%. Still, this decline was smaller than the 3.8% economists expected and far less dramatic than June’s 9.3% drop.
Beneath that, core durable goods orders, which exclude defense and aircraft, jumped 1.1% against expectations of just 0.2%. Business investment orders followed the same trend, rising 1.1% after a contraction in June.
These results show companies are still spending on equipment, even as overall manufacturing cools. Housing continues to soften under the pressure of high mortgage rates.
The FHFA house price index slipped 0.2%, more than the 0.1% forecast, while annual growth slowed to 2.6%. The Case-Shiller 20-city index held steady month-on-month, with yearly prices up 2.1%, matching estimates but lower than the 2.8% recorded earlier.
This confirms a slowdown, though not a collapse. Consumers remain a stabilizing force. Redbook sales rose 6.5% year-on-year, faster than June’s 5.9%, pointing to solid retail spending.
Confidence levels tell a mixed story: the Conference Board’s index reached 97.4, slightly lower than July’s 98.7 but stronger than the 96.4 expected. These readings reflect resilience in demand even as sentiment softens.
Regional Fed reports underline the split between factory activity and services. Manufacturing in Richmond contracted less than feared, with its index improving to -7 compared with -20 last month.
At the same time, services expanded strongly. The Dallas Fed reported services revenues up to 8.6 from 6.3, while the Texas outlook index jumped to 6.8 from 2.0.
Together, these exceeded forecasts and show that services are carrying more economic weight as factories lag. The Atlanta Fed’s GDPNow model kept its third-quarter growth estimate near 2.2%, unchanged from last week.
Energy markets are also in focus, with crude oil inventories expected to fall again, pointing to steady demand. Money supply remains tight, with overall M2 steady around $22 trillion.
Behind these mixed numbers, the core message is clear: the U.S. economy keeps defying predictions of sharper weakness.
Manufacturing cycles remain rough, and housing continues to cool, but investment, services, and consumer spending still surprise to the upside. Growth is modest, but it is proving far more durable than many expected.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief