Weekly Economic Recap 6.29 - 7.5.26

Weekly Economic Recap: June 29 – July 5, 2026

This week's data releases painted a picture of a labor market that's cooling in some corners while staying surprisingly resilient in others, alongside continued softness in housing and mortgage rates drifting to a one-month low.

Housing: Prices Cool, But Inflation Still Wins

Tuesday's S&P Case-Shiller Home Price Index showed home prices up 1.1% year-over-year in April 2026, edging past March's 0.9% gain and beating market expectations. It's the first acceleration in home price growth since November 2025 — but home prices have now trailed overall inflation for 11 straight months. On a month-over-month basis, growth actually slowed to 1% in April from 1.1% in March.

Wednesday brought a bit of relief for borrowers: the MBA 30-year mortgage rate fell slightly to 6.57% for the week ending June 26, marking its second consecutive weekly drop and the lowest level in a month. Total mortgage applications were flat, but applications specifically to purchase a home ticked up 0.5%.

Labor Market: Mixed Signals

The jobs data this week told a more complicated story than the headline numbers suggest.

JOLTS data (Tuesday) showed job openings rose by 9,000 to 7.594 million in May — the highest reading in two years, and a sign of continued labor market resilience despite the ongoing Iran conflict. The Midwest led with 115,000 openings. But hires held steady at 5.2 million and separations barely moved at 5.1 million, while quits stayed largely flat at 3.1 million (specifically, 3.065 million, up slightly from 3.043 million). The quits rate held at 1.9% — the lowest since 2020 and signaling a lack of employee confidence.

ADP private payrolls (Wednesday) added just 98,000 jobs in June, falling short of both May's 122,000 and forecasts of 113,000. Small businesses added 53,000 jobs, mid-sized companies 29,000, and large companies just 25,000. Pay growth held steady at 4.4% for job-stayers, while job-switchers saw gains accelerate to 6.6%.

Then came Thursday's flurry of releases:

• Unemployment rate unexpectedly dropped from 4.3% to 4.2% in June, though this was largely driven by people leaving the workforce rather than new job creation. The number of unemployed fell by 213,000 to 7.09 million.
• Average hourly earnings rose 3.5% year-over-year in June, up from 3.4% in May. Month-over-month, wages climbed 13 cents (0.3%) to $37.64, matching May's pace.
• Labor force participation told the real story behind the falling unemployment rate: the labor force shrank by 720,000 to 169.36 million, pushing the participation rate down to 61.5% — its lowest level since March 2021.
• Jobless claims offered a split picture: the 4-week average ticked down to 222,000, and initial claims fell to 215,000 (a 5-week low, beating expectations of 220,000). But continuing claims rose to 1.814 million, the highest in three months — reinforcing that once people lose jobs, it's taking longer to find new ones.

The Big Picture

Taken together, the week's data suggests an economy where headline numbers (a falling unemployment rate, accelerating home prices) look encouraging on the surface, but the underlying details — a shrinking labor force, slower hiring, and rising continuing claims — point to a labor market that's losing momentum. Housing remains stuck in a low-growth holding pattern, with modest price gains still losing the race against broader inflation.