Rising costs and falling confidence in the U.S. economy are fast becoming a toxic cocktail for the housing market. As a result, a growing number of buyers are backing out of deals they’ve made with homebuilders and sellers of existing homes. Homebuilder cancellation rates have more than doubled since April. In July, 17.6% of builder contracts fell through, compared with 8% in April and 7.5% in July 2021.
Production at U.S. factories increased more than expected in July as output rose at motor vehicle plants and elsewhere, pointing to underlying strength in manufacturing despite ebbing business confidence. Manufacturing output rebounded 0.7% last month after declining 0.4% in June. Manufacturing, which accounts for 11.9% of the U.S. economy, remains supported by strong demand for goods even as spending is gradually shifting back to services. But risks are rising, with retailers sitting on excess inventory, especially of apparel.
Target said their quarterly profit fell nearly 90% from a year ago, as the retailer followed through on their warning that steep markdowns on unwanted merchandise would weigh on its bottom line. The big-box retailer missed Wall Street’s expectations by a wide margin, even after the company itself lowered guidance twice.