Even with its new chair, the Federal Reserve kept its short-term interest rate target unchanged. Here are five things we learned from U.S. economic data released during the week ending June 19.
The Fed was less verbose after leaving rates unchanged. The much shorter policy statement released after this past week’s Federal Open Market Committee (FOMC) meeting said that economic growth was “at a solid pace” despite the impact of the Middle East conflict. It noted “strong” productivity growth and capital investment and that the U.S. economy’s “job gains have kept pace with the workforce.” As a result, the committee voted unanimously to keep the fed funds target rate at 3.50 – 3.75 percent and to continue “maintaining ample reserves in the banking system.” Concurrently released were economic forecasts from most of the Board members and Bank presidents. They pegged 2026 economic growth at 2.2 percent, with inflation at +3.6 percent (core inflation at +3.3 percent). The median forecast has a quarter-point fed funds rate hike this year and a single quarter-point cut in 2027.
Retail sales heated up in May. Retail and food services sales rose 0.9 percent to a seasonally adjusted $763.7 billion. The Census Bureau data series has grown 6.9 percent over the past year, with sales over the past three months (March – May 2026) up 5.3 percent versus the comparable 2025 period. Much of the gain reflects increases at gas stations (+3.4 percent, due to higher pump prices) and motor vehicle/parts dealers (+1.2 percent). Net of both, core retail sales were up a still robust 0.5 percent for the month and 5.6 percent from a year earlier, with the past three months’ sales up 5.1 percent ahead of the 2025 comparable. Sales improved at retailers focused on furniture (+1.0 percent), apparel (+0.3 percent), and sporting goods/hobbies (+0.3 percent), and held steady at grocery stores and building material retailers. Sales fell at electronics/appliance retailers (-0.5 percent), department stores (-0.3 percent), and restaurants/bars (-0.1 percent).
Manufacturing production was flat in May. The Federal Reserve reports that manufacturing output was flat on a seasonally adjusted basis, ending a five-month streak of increases for the sector. Durable goods production rose 0.8 percent (with gains across “almost all” sectors), while nondurables production fell 0.9 percent (with declines across “almost all” sectors). Overall industrial production inched up 0.1 percent during the month, following April’s 0.9 percent advance. Mining output jumped 1.3 percent, while utilities recorded a 0.4 percent decline. Manufacturing output has risen 1.4 percent over the past year, with overall industrial production up 1.3 percent.
Forward-looking economic measures improved in May. The Conference Board’s Leading Economic Index (LEI) edged up 0.1 percent to 99.3 (2016=100). Despite a second consecutive monthly gain, the LEI was down 0.3 percent over the past six months. Six of ten LEI components contributed positively to the index, led by the stock market and the interest rate spread. The Coincident Economic Index (CEI) increased 0.2 percent to 114.6. The CEI has grown 0.6 percent over the past six months. All four CEI components contributed positively, led by personal income and business sales. The Lagging Economic Index (LAG) slipped 0.1 percent to 120.5. The LAG has risen 0.9 percent over the past six months. The Conference Board anticipates the U.S. economy will expand by 1.6 percent in 2026.
Housing starts plummeted in May. Privately owned housing starts fell 15.4 percent to a seasonally adjusted annualized rate (SAAR) of 1.177 million units. The Census Bureau data series was 8.7 percent below its year-ago level. Starts of single-family homes declined 1.9 percent to 882,000, while those of multi-family units fell 41.6 percent to 284,000. Looking ahead, the annualized count of issued building permits decreased 0.7 percent to 1.413 million (-0.2 percent versus May 2025). Housing completions fell 8.1 percent to an annualized 1.313 million. Completions were down 14.2 percent from a year earlier.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending June 13, 2026, First-Time Claims, seasonally adjusted): 226,000 (-4,000 vs. the previous week, -17,000 vs. the same week a year earlier). 4-week moving average: 223,250 (-7.8% vs. the same week a year earlier).
- Import Prices (May 2026, All Imports, not seasonally adjusted): +1.9% vs. April 2026; +6.7% vs. May 2025. Nonfuel Imports: +0.8% vs. April 2026; +3.7% vs. May 2025.
- Export Prices (May 2026, All Exports, not seasonally adjusted): +1.3% vs. April 2026; +11.2% vs. May 2025. Non-agricultural Exports +1.2% vs. April 2026; +11.8% vs. May 2025.
- Business Inventories (April 2026, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.727 trillion (+0.5% vs. March 2026; +2.7% vs. April 2025).
- Pending Home Sales (May 2026, Index (2001=100), seasonally adjusted): 76.8 (+3.8% vs. April 2026; +4.8% vs. May 2025)
- Housing Market Index: (June 2026, Index (>50= The Majority of Homebuilders Feel Confident About the Housing Market, seasonally adjusted): 35 (May 2026: 37; June 2025: 32).
- Treasury International Capital Flows (April 2026, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$206.0 billion (March 2026: +$95.8 billion; April 2025: -$67.1 billion.
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What We Learned About the U.S. Economy Last Week 