The U.S. economy remains in a "no-fire, low-hire" phase, with unemployment staying near historic lows but jobless claims inching up. Meanwhile, consumer debt has surged to a new record, driven by rising mortgage balances. Here’s a breakdown of the latest economic trends shaping the nation.
Job Market: Stable but Challenging for Job Seekers
-
Jobless claims rose slightly to 226,000 (up 7,000) for the week ending August 2.
-
The unemployment rate held at 4.2%, near historic lows.
-
Continued jobless claims climbed to 1.97 million, the highest since 2021, signaling that finding new jobs is taking longer.
-
Employers are hiring cautiously, likely due to lingering trade disputes and economic uncertainty.
Consumer Debt Reaches $18.39 Trillion in Q2 2025
-
Mortgage debt led the surge, rising by $131 billion to $12.94 trillion.
-
Credit card debt increased to $1.21 trillion, while auto loans hit $1.66 trillion.
-
Student loan delinquencies spiked to 12.9%, up sharply from 0.8% a year ago.
-
Despite high debt levels, mortgage delinquencies remain low (1.29%), indicating strong household financial management.
Housing Sentiment Improves, but Affordability Concerns Persist
Fannie Mae’s Home Purchase Sentiment Index (HPSI) rose to 71.8 in July, with consumers feeling more optimistic about:
-
Job security (75% not worried about losing jobs, up 6% from June).
-
Home price growth (46% expect prices to rise).
-
Mortgage rates (28% believe rates will fall).
However, 77% still see it as a bad time to buy, reflecting ongoing affordability challenges.
Inflation & Consumer Outlook
-
One-year inflation expectations ticked up to 3.1% (from 3.0%).
-
Consumers are more optimistic about taxes, expecting smaller increases due to recent federal reforms.
-
Labor market expectations are mixed—fewer fear rising unemployment, but job loss concerns persist.
CEO Confidence Rises, But Caution Remains
-
The CEO Confidence Index jumped to 49 (from 34 in Q2), though still below the neutral 50 mark.
-
Recession fears dropped sharply (from 83% to 36%).
-
64% of CEOs plan to pass rising costs to consumers, which could fuel inflation.
Stay tuned for more economic insights as we track these trends in the coming months!
The Bottom Line
The economy remains resilient with low layoffs and steady inflation, but rising debt and cautious hiring hint at underlying pressures. Housing affordability and student debt are key challenges ahead.
Would you like more insights on how these trends could impact your real estate decisions? Let us know! To schedule a meeting, email us at [email protected]
For more insights and expert analysis on real estate trends, visit the California Association of REALTORS® (C.A.R.) at www.car.org.
