Data deluge to close out the first half

Trend watch

Summer is officially here. Weekly air passenger counts crossed 19.4 million and is approaching the all-time record of 19.7 set last June.  Again, we anticipate that it’ll touch 20 million in the coming few weeks.

Also, container freight volumes at U.S. ports should rebound in June and July after being hammered in May. Combined container traffic at six of the top U.S. ports plunged 13.2% in May. But ship bookings from China to the United States surged in mid-May after tariffs were relaxed and appear to be normalizing through early June (see slide 7). Those ships that left China in mid-to-late May have started to arrive in the U.S. While ports report volumes on a monthly basis, U.S. rail volumes – which are reported weekly – have climbed for three straight weeks after an ugly five-week slide during May and early June.

New charts this week

• Scheduled ship bookings from China to U.S. collapsed in April, rebounded in May, normalizing in June (slide 7).
• Existing home sales and prices both up in May (slide 8).
• New home sales plunged in May as prices rose (slide 9).
• SPG’s manufacturing and services indices both rose in June (slide 10).
• New single-family housing activity has collapsed (slide 11).
• Revisions lowered 1Q25 results as spike in imports due to tariff front running wiped out growth, while consumer spending pace slowed considerably (slide 12).
• Tariff front running ripples through U.S. trade balance (slide 13).
• Durable goods orders jump in May as private aircraft orders soar (slide 14).
• Fed’s favorite inflation gauge well behaved, but largely doesn’t reflect tariffs (slide 13).
• Big 4 indicators point toward continued, albeit slower, growth for the U.S. 

Our take

There was a deluge of economic reports this week as data providers work around the upcoming Independence Day holiday and close out the first quarter of 2025.

We’d categorize the tenor as mixed. For instance, new durable goods orders soared to a fresh all-time high thanks to a surge in commercial aircraft and military orders. Excluding those, core orders rose in May and are now just 2.7% below the all-time high.

Conversely, the housing industry data remained sour. New home sales crashed in May, while existing single-family home sales rose a tepid 1.1%. Both should be much stronger in May as it’s the heart of the traditional summer selling season, but both are plagued by the one-two punch of sky-high prices and high mortgage rates. (Home prices are elevated compared to pre-COVID levels.)

Additionally, there’s the aforementioned ripple within freight volumes, which have swung wildly in the past two months due to on-again/off-again tariffs. That’s particularly true for freight from China, which is the third largest trading partner overall, but accounts for roughly one-third of imported container volumes.

With turbulence likely as the ripple in freight becomes more apparent in other economic data in the coming months, we recommend buckling up. More importantly, those ripples will likely make for more big swings in economic data released during July, August, and beyond.

Given the short-term distortions in the economic data, we’d also advise against extrapolating based on that data. It’s best to zoom out and take a somewhat longer view until there’s more clarity on trade policy. For now, the true underlying trends likely aren’t as bad nor as good as they currently appear depending on what economic variable you’re looking at.

Lastly, all eyes will be on the June employment report, which includes the monthly change in jobs and the unemployment rate, when it’s released this Thursday. We anticipate that roughly 135,000 jobs were created in June and that the unemployment rate stayed near 4.2%.

Bottom line

The U.S. remains in a ‘muddle-through’ environment—where growth is slowing but not stalling—and we expect the Fed to stay in ‘wait & see’ mode for now. We also anticipate economic data will continue to jostle about due to tariffs—replete with air pockets as demand normalizes following accelerated purchases in the early spring when consumers and businesses attempted to front-run tariffs.