From the Desk - Economic Commentary
Brandon Casey, Member Strategies - 6/25/2026
U.S. equity markets are mixed this morning as investors digest multiple economic data releases, including the latest inflation report. Both the DJIA and S&P 500 are higher, while the Nasdaq is lower. U.S. Treasury yields edged lower after the release of the PCE inflation report, with the 10-year yield down nearly four basis points.
The PCE Price Index remained elevated in May with the headline index increasing 0.4% month-over-month and 4.1% year-over-year, marking the highest annual rate since April 2023. Core PCE, which excludes food and energy, rose 0.3% on the month and 3.4% from a year earlier, with the annual reading reaching its highest level since late 2023.
Consumer spending remained strong in May, increasing 0.7% during the month, supported by both goods and services spending. Personal income also rose 0.7%, reflecting gains in wages and farm income, while disposable personal income increased by a similar amount. The personal savings rate increased slightly to 3.0%, up from prior months, suggesting some stabilization in household balance sheets after a period of declining savings.
Initial jobless claims for the week ending June 20 declined to 215,000, down 11,000 from the prior week and below expectations. Initial claims were expected to fall to 223,000. Continuing claims rose to 1.821 million for the prior week, up 21,000.
The third estimate of first quarter 2026 U.S. GDP showed revised stronger growth, with real GDP increasing at an annualized rate of 2.1%, up from the prior estimate of 1.6%. The upward revision was driven primarily by a smaller-than-expected increase in imports, which boosted net exports, partially offset by downward revisions to consumer spending. Growth was supported by gains in investment, exports, government spending, and consumer activity, while imports continued to act as a drag.
Durable goods orders declined in May, reflecting volatility in transportation equipment. New orders fell 4.5%, reversing an 8.5% increase in April. However, underlying demand remained more stable, with orders excluding transportation rising 1.3%, and core capital goods orders, a proxy for business investment, increasing 1.6%.
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