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First Post
3 days ago
- Business
- First Post
US retail sales post biggest drop of 2025 as tariffs and economic worries bite
Amid warnings of a grim second half of the year, US retail sales fell 0.9%. The worse-than-expected decline coincided with decline in manufacturing and loss of home-buyer sentiment to lowest in three years. read more US retail sales fell 0.9 per cent in May — worse than the economists' expectation of a 0.6 per cent fall. This is This was the sharpest monthly decline in retail sales since January and the second consecutive decline after sales fell 0.1 per cent in April. The retail sales decline is one of the many adverse markers that economist and business leaders interpret as a sign of incoming troubles. The adverse markers have emerged at a time when US President Donald Trump's trade policies, primarily driven by tariffs, have sown uncertainty in global trade and have plunged the United States into fears of inflation — or something worse known as 'stagflation' in which inflationary and recessionary pressures coexist. STORY CONTINUES BELOW THIS AD Industrial production falls, home-builder sentiment lowest since 2022 Beside retail sales decline, industrial production fell 0.2 per cent in May for the second time in three months. The fall in industrial production is a sign that the uptick in economic activity in the first quarter is now over. The 0.2 per cent decline was more than 0.1 per cent forecast by economists in a survey conducted by Wall Street Journal. The NAHB/Wells Fargo Housing Market Index, which measures home-builder confidence, fell to the lowest since 2022. In retail sales as well as industrial production, automobile sector was the only promising sector. Manufacturing rose 0.1 per cent in May compared to 0.5 per cent contraction the previous month on the back of a jump in automobile production. Excluding automobiles, manufacturing fell 0.3 per cent. Trump's tariffs are doing little to support investment in domestic manufacturing capacity by making foreign-produced goods less competitive, said Samuel Tombs, the Chief US Economist at Pantheon Macroeconomics, to MarketWatch. Foreign companies may also be hesitant to source US-manufactured goods out of concern that their governments may impose new tariffs if the trade war intensifies, Tombs further said. In May, vehicles and parts output increased 4.9 per cent. Retail sales fell 0.3 per cent excluding automobiles. This was worse than the estimate of 0.1 per cent again. 'Americans bought cars in March ahead of tariffs and stayed away from car dealerships in May. Families are wary of higher prices and are being a lot more selective with where they spend their money. People are hunting for deals and aren't eager to buy unless they see a good one,' said Heather Long, the Chief Economist at Navy Federal Credit Union, told CNBC. STORY CONTINUES BELOW THIS AD Grim forecasts for second half — thanks to tariffs In the midst of such markers, economists and business leaders have warned it is about to get worse. Sal Guatieri, a senior economist at BMO Capital Markets, said, 'Trade-war uncertainty, rising input prices, and slowing US and global demand are expected to weigh on manufacturing activity this year. We are forecasting a large pullback in business-equipment spending in the second quarter following a first-quarter surge.' Sam Bullard, senior economist at Wells Fargo, said the outlook for industrial production over the rest of the year 'is dim, as slowing economic growth and the strains of tariffs lead to quarterly declines over the final three quarters of 2025'. Michael Pearce, the Deputy Chief Economist at Oxford Economics, told Reuters, 'Tariff announcements have had a clear impact on the timing of large-ticket purchases, notably autos, but there are few signs yet that tariffs are leading to a general pullback in consumer spending. We expect a more marked slowdown to take hold in the second half of the year, as tariffs begin to weigh on real disposable incomes.' STORY CONTINUES BELOW THIS AD The weakening of US dollar as a result of loss of confidence in the currency because of Trump's trade policies, is a sign 'that inflation will pick up this summer and into the fall as prices start to reflect the higher costs for goods from enacted tariffs' Ben Ayers, a senior economist at Nationwide, told the news agency.
Business Insider
3 days ago
- Business
- Business Insider
Stock Market News Review: SPY, QQQ Sink amid Israel-Iran Escalation, Weak Retail Sales Data
Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) closed in red territory as the Israel-Iran conflict drags into its fifth day. On Tuesday, President Trump convened a National Security Council meeting in order to discuss the turmoil. According to Axios, Trump is ' seriously considering ' launching an attack on Iran's nuclear facilities. The U.S. has also beefed up its defensive measures by sending planes and aircraft carriers to the Middle East. Confident Investing Starts Here: The SPX and NDX opened the trading session lower after May's retail sales data showed a 0.9% month-over-month (MoM) fall, lower than the estimate for a 0.6% drop. Core retail sales, which exclude volatile items like gas, cars, and building materials, rose by 0.4% MoM, ahead of the estimate for a 0.3% rise. The lower opening comes despite the U.S. and UK finalizing their trade deal reached last month. Under the deal, tariffs on the first 100,000 UK vehicles imported to the U.S. will be set at 10%, down from 27.5%, while the U.S. baseline tariff on imported UK goods will remain in place. In the meantime, both sides will continue to negotiate steel, aluminum, and pharmaceutical tariffs. The market's muted reaction to the signed deal is likely due to the fact that it contained no new material developments compared to the initial deal. Meanwhile, sentiment among single-family homebuilders is on the decline. June's Housing Market Index (HMI) tallied in at 32, the lowest reading since December 2022 and below the estimate for 36. A reading above 50 signals that most surveyed homebuilders feel confident about the current and near-term housing landscape. The main market catalyst in the short-term remains the Israel-Iran conflict. In a Truth Social post, Trump demanded ' UNCONDITIONAL SURRENDER ' from Iran and said that the U.S. knows where Supreme Leader Ayatollah Ali Khamenei is hiding but will refrain from targeting him.
Miami Herald
13-06-2025
- Business
- Miami Herald
Here's how US tariffs may affect home prices in 2025
Here's how US tariffs may affect home prices in 2025 New tariffs are set to increase the cost of building, buying, and renovating homes-creating another barrier in an already tough housing market. NewHomeSource, a new home listings site with customer reviews, breaks down how tariffs will impact homebuyers. Why it matters: With high mortgage rates and low inventory, homebuyers are already struggling. Now, tariffs will raise prices even further. "A lot of the uncertainty [in the housing market] comes down to tariffs," says New Home Source chief economist Ali Wolf. What's happening: The U.S. government is imposing tariffs up to 25% on key goods from Mexico and Canada. Goods from China were temporarily rolled back from 145% to 30% as of May 14, 2025, for a span of 90 days. On June 11, President Donald Trump said the U.S. and China reached an agreement, with tariffs on Chinese imports set at 55%. See More: Here's How Trump's Tariffs May Affect Home Insurance Prices in 2025 Key materials affected by tariffs: Lumber: A 25% tariff on Canadian goods adds to an existing 14.5% duty, raising softwood lumber prices by nearly 40%.Concrete, cement, gypsum: About 25% of the U.S. supply is imported, mainly from Canada and and aluminum: Both materials, essential for framing and roofing, are now subject to a 25% and fixtures: Many products are sourced from China, with price increases expected. Industry experts say construction costs could rise 4% to 6%.That adds $5,000 to $20,000 to the price of a new surveyed by the National Association of Home Builders in March estimate a smaller, but still notable, $9,200 Tomalak, Zonda's principal, advisory of building products, says "including a 2.5% baseline rate [of inflation], tariffs could increase the cost of building materials by 9%." First-time buyers and those looking for affordable homes will feel it most. "We're in an environment where affordability is stretched and we don't want to be adding to any additional costs. Tariffs could play a role in making that worse," says Wolf. "The tariff impact isn't isolated to just new homes, though," adds Wolf. "If you are considering an existing home that needs to be remodeled, you might be surprised with how much money the whole project will cost." See More: How Credit Scores Are Shaping the 2025 Housing Market Differing opinions on cost increases due to tariffs The National Association of Home Builders' April Housing Market Index estimates tariffs could add $10,900 to the cost of a typical new home. However, in Zonda's Q2-2025 Housing Market Forecast, data points to the cost only rising by $5,000. Given the flux surrounding global tariffs, it's difficult to predict a static number for the coming months. Where prices are already increasing Manufacturers may continue to raise prices regardless of tariffs. Tomalak reports that the three major roofer manufacturers - Owens Corning, CertainTeed, and GAF - have already raised prices between 7% to 10% as of April 1. Will tariffs affect other areas of a new home purchase such as insurance? The short answer - probably yes. "Tariffs on imported building materials will increase the cost of rebuilding a home, which will raise home insurance premiums," says Insurify's Matt Brannon. With additional reporting from Carmen Chai. This story was produced by NewHomeSource and reviewed and distributed by Stacker. © Stacker Media, LLC.
Miami Herald
19-05-2025
- Business
- Miami Herald
Builders Have Bad News for Donald Trump's Housing Market
Builder confidence in the U.S. housing market fell sharply in May, marking its lowest level since November 2023, according to a new report from the National Association of Home Builders (NAHB). Developers are contending with a sluggish selling season and mounting economic pressures. The NAHB/Wells Fargo Housing Market Index (HMI) dropped six points to 34, mirroring the November 2023 reading and only slightly above December 2022's low of 31. The downturn comes at a sensitive moment for President Donald Trump, whose administration faces growing scrutiny over trade policy and inflation. Per the NAHB, persistent uncertainty around tariffs, rising building material costs, and sustained high interest rates have rattled builder sentiment. These headwinds have forced builders to slash prices during the peak homebuying season. The decline in builder confidence poses challenges for a housing sector central to Trump's economic messaging. The spring season—typically one of the most active periods for home sales—has failed to gain traction. In response, 34 percent of builders cut home prices in May, up from 29 percent in April, with an average price reduction of 5 percent. Sales incentives remained elevated, with 61 percent of builders offering them, according to the NAHB. The NAHB/Wells Fargo Housing Market Index is based on a monthly survey asking builders to rate current sales conditions, expectations for the next six months, and prospective buyer traffic. All three components declined in May: current sales dropped eight points to 37, future sales dipped one point to 42, and buyer traffic slid to 23. A reading below 50 indicates that more builders view conditions as poor than good. The timing of the latest survey data is also notable. Approximately 90 percent of builder responses were collected before the May 12 announcement that the U.S. and China had agreed to suspend tariffs for 90 days to resume trade talks. The U.S. and China agreed to lower their rates by 115 percentage points. This agreement lowered the tariffs imposed on Chinese goods by President Donald Trump to 30 percent and those imposed on U.S. goods by Beijing to 10 percent. Trump initially announced his sweeping global tariffs on April 2, including a baseline 10 percent on all imported goods and "reciprocal" tariffs. While this may offer some future relief, it did not factor into the May confidence reading. Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Builders face the usual challenges of volatile commodity prices, but add in the unpredictable impact of tariffs, and it gets even tougher. Price swings on materials make it hard to maintain stable margins, adding pressure to an already tight market." Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "Uncertainty around tariffs and the unknown construction costs are certainly playing into homebuyer and builder sentiment, but I really think the driver is overall housing prices and interest rates. A lot of people are choosing to stay on the sidelines, waiting for the housing market to soften and interest rates to tick down, with the hopes they can find a home and mortgage that is more affordable." While builders await the effects of the temporary tariff suspension and potential tax reforms, confidence levels remain vulnerable to broader economic shifts. "Builders buy in bulk and rely on stable margins. When input costs are unpredictable, it's nearly impossible to price homes accurately," Thompson said. "This affects both the affordability for buyers and the profitability for builders, creating a ripple effect throughout the market." Any sustained progress in trade negotiations or monetary policy adjustments could help boost sentiment in the months ahead. Until then, developers are likely to continue leaning on price cuts and incentives to attract hesitant buyers. "Just like any market, the housing and interest rate markets are nearly impossible to time, and that could be costing potential homebuyers dearly... Waiting for a housing and interest rate correction or crash may be costing consumers more than it's worth," Powers said. Related Articles Florida's Population Makes Major ShiftTexas Housing Market Enters 'Major Correction Phase'America's Most Expensive Area Sees Surge in People Trying to Sell HomesHousing Shortage Hurting Middle-Class Americans Most 2025 NEWSWEEK DIGITAL LLC.
Newsweek
19-05-2025
- Business
- Newsweek
Builders Have Bad News for Donald Trump's Housing Market
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Builder confidence in the U.S. housing market fell sharply in May, marking its lowest level since November 2023, according to a new report from the National Association of Home Builders (NAHB). Developers are contending with a sluggish selling season and mounting economic pressures. The NAHB/Wells Fargo Housing Market Index (HMI) dropped six points to 34, mirroring the November 2023 reading and only slightly above December 2022's low of 31. Why It Matters The downturn comes at a sensitive moment for President Donald Trump, whose administration faces growing scrutiny over trade policy and inflation. Per the NAHB, persistent uncertainty around tariffs, rising building material costs, and sustained high interest rates have rattled builder sentiment. These headwinds have forced builders to slash prices during the peak homebuying season. The decline in builder confidence poses challenges for a housing sector central to Trump's economic messaging. The spring season—typically one of the most active periods for home sales—has failed to gain traction. In response, 34 percent of builders cut home prices in May, up from 29 percent in April, with an average price reduction of 5 percent. Sales incentives remained elevated, with 61 percent of builders offering them, according to the NAHB. What To Know The NAHB/Wells Fargo Housing Market Index is based on a monthly survey asking builders to rate current sales conditions, expectations for the next six months, and prospective buyer traffic. All three components declined in May: current sales dropped eight points to 37, future sales dipped one point to 42, and buyer traffic slid to 23. A reading below 50 indicates that more builders view conditions as poor than good. The timing of the latest survey data is also notable. Approximately 90 percent of builder responses were collected before the May 12 announcement that the U.S. and China had agreed to suspend tariffs for 90 days to resume trade talks. The U.S. and China agreed to lower their rates by 115 percentage points. This agreement lowered the tariffs imposed on Chinese goods by President Donald Trump to 30 percent and those imposed on U.S. goods by Beijing to 10 percent. Trump initially announced his sweeping global tariffs on April 2, including a baseline 10 percent on all imported goods and "reciprocal" tariffs. While this may offer some future relief, it did not factor into the May confidence reading. A real estate sign is seen in front of a house for sale in West Los Angeles on November 20, 2020. A real estate sign is seen in front of a house for sale in West Los Angeles on November 20, 2020. CHRIS DELMAS/AFP via Getty Images What People Are Saying Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Builders face the usual challenges of volatile commodity prices, but add in the unpredictable impact of tariffs, and it gets even tougher. Price swings on materials make it hard to maintain stable margins, adding pressure to an already tight market." Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "Uncertainty around tariffs and the unknown construction costs are certainly playing into homebuyer and builder sentiment, but I really think the driver is overall housing prices and interest rates. A lot of people are choosing to stay on the sidelines, waiting for the housing market to soften and interest rates to tick down, with the hopes they can find a home and mortgage that is more affordable." What Happens Next While builders await the effects of the temporary tariff suspension and potential tax reforms, confidence levels remain vulnerable to broader economic shifts. "Builders buy in bulk and rely on stable margins. When input costs are unpredictable, it's nearly impossible to price homes accurately," Thompson said. "This affects both the affordability for buyers and the profitability for builders, creating a ripple effect throughout the market." Any sustained progress in trade negotiations or monetary policy adjustments could help boost sentiment in the months ahead. Until then, developers are likely to continue leaning on price cuts and incentives to attract hesitant buyers. "Just like any market, the housing and interest rate markets are nearly impossible to time, and that could be costing potential homebuyers dearly... Waiting for a housing and interest rate correction or crash may be costing consumers more than it's worth," Powers said.
