This material includes forward-looking statements subject to risks and uncertainties; actual results may differ.
Labor Force Shrinks Despite Lower Unemployment
The unemployment rate fell to 4.2% in June, but the decline was largely driven by 720,000 people leaving the labor force rather than stronger hiring. Labor force participation dropped to 61.5%, its lowest level since 2021 and, excluding the pandemic period, the weakest reading in 50 years. Household employment fell by more than 500,000. The decline was particularly notable among prime-age workers (25-54), suggesting the weakness extends beyond retirements or lower immigration. Economists view the falling participation rate as a more concerning indicator than the headline unemployment rate, signaling that job opportunities may be becoming more limited.
U.S.-Iran Conflict Escalates Around Strait of Hormuz
Iran launched retaliatory strikes on U.S. military bases across several Gulf states after renewed U.S. attacks targeted Iranian military infrastructure tied to threats against shipping in the Strait of Hormuz. The latest exchange has effectively derailed last month's interim peace agreement and intensified uncertainty over the security of the vital waterway, which carries roughly 20% of global oil shipments. Oil prices rose as markets reacted to renewed fears of supply disruptions, while the U.S. and Iran issued conflicting claims over whether the Strait remains open to commercial traffic. The escalating conflict has also strained diplomatic efforts, with Iran accusing the U.S. of undermining negotiations and regional security initiatives involving Oman.
New Housing Law Targets Supply, Affordability
A new bipartisan housing law aims to increase the U.S. housing supply by reducing regulatory barriers, expanding financing options, and limiting large institutional investors from buying additional single-family homes. Key provisions include broadening the definition of manufactured homes to lower construction costs and launching a pilot program to improve access to small mortgages and down payment assistance. While the measures are designed to ease affordability over time, housing experts caution that construction and zoning changes take years to meaningfully impact supply. As a result, homebuyers and sellers should not expect immediate relief from high home prices or elevated mortgage rates.
As always, Base Wealth Management remains focused on aligning investment strategies with your long-term goals amid evolving market conditions.
