Bond Market Update
Updated: 18-Jun-25 09:23 ET
Disappointing housing starts data for May
Data Recon
- Housing starts declined 9.8% month-over-month in May to a seasonally adjusted annual rate of 1.256 million units (Briefing.com consensus 1.356 million), while building permits declined 2.0% month-over-month to a seasonally adjusted annual rate of 1.393 million (Briefing.com consensus 1.411 million).
- The key takeaway from the report is that housing starts are weak, sitting at their lowest level since May 2020; moreover, a 2.7% month-over-month decline in single-unit permits doesn't connote an encouraging outlook for starts.
- The change in single-unit starts by region: Northeast (-9.9%); Midwest (+1.4%); South (-1.7%); and West (+10.2%).
- The change in single-unit permits by region: Northeast (-3.3%); Midwest (0.0%); South (-2.4%); and West (-5.1%).
- Multi-unit starts declined 29.7% month-over-month, while multi-unit permits decreased 0.8% month-over-month.
- The number of units under construction at the end of the period decreased 1.4% month-over-month to a seasonally adjusted annual rate of 1.375 million.
- The key takeaway from the report is that housing starts are weak, sitting at their lowest level since May 2020; moreover, a 2.7% month-over-month decline in single-unit permits doesn't connote an encouraging outlook for starts.
- Initial jobless claims for the week ending June 14 decreased by 5,000 to 245,000 (Briefing.com consensus 253,000), while continuing jobless claims for the week ending June 7 decreased by 6,000 to 1.945 million.
- The key takeaway from the report is that it covers the week in which the survey for the June employment report is conducted, and with initial jobless claims still at a relatively low level, there will be a basis for economists to expect another decent gain in nonfarm payrolls (all things considered).
- The four-week moving average for initial claims increased by 4,750 to 245,500, reaching its highest level since August 19, 2023.
- The four-week moving average for continuing claims increased by 13,000 to 1,926,250, reaching its highest level since November 20, 2021.
- The total number of continued weeks claimed for benefits in all programs for the week ending May 31 was 1,854,556, an increase of 70,748 from the previous week and compared to 1,731,054 in the comparable week a year ago.
- The key takeaway from the report is that it covers the week in which the survey for the June employment report is conducted, and with initial jobless claims still at a relatively low level, there will be a basis for economists to expect another decent gain in nonfarm payrolls (all things considered).
- Yield check:
- 2-yr: -1 bp to 3.94%
- 3-yr: -2 bps to 3.88%
- 5-yr: -1 bp to 3.97%
- 10-yr: -2 bps to 4.37%
- 30-yr: -2 bps to 4.87%
