It is sometimes difficult to express how big an event the Fourth of July is within the United States. The annual celebration of the nation's founding through its Declaration of Independence from the United Kingdom in 1776 features events like parades, barbecues, games, picnics, sporting events, concerts and fireworks have been core elements of the day from the beginning.

You don't have to take our word for it. Here's an excerpt of a letter future U.S. President John Adams wrote to his wife Abigail on July 3, 1776, the day after the Continental Congress voted to officially sever the rule of King George III over the thirteen American colonies, about how he thought the people of the new nation should celebrate their Independence as a new nation:

The Second Day of July 1776, will be the most memorable Epocha, in the History of America. — I am apt to believe that it will be celebrated, by succeeding Generations, as the great anniversary Festival. It ought to be commemorated, as the Day of Deliverance by solemn Acts of Devotion to God Almighty. It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.

Adams was mostly right. He missed the date that would mark the official birth of the United States as an independent country. The Continental Congress got hung up on working out the language of the official Declaration of Independence document and didn't approve and sign it until the Fourth of July, which became Independence Day on the American calendar.

249 years later, Americans still follow Adams' plan for how to celebrate the event. A fantastic example of the scale of the celebration can be found from just five years ago, when the Coronavirus Pandemic had led many state and local governments to sharply restrict gatherings and activities.

But that didn't stop 2020's Fourth of July's fireworks. Attractions 360 flew a camera on a drone to capture footage of fireworks being launch throughout Los Angeles' San Gabriel Valley. Here's their video:

It is pretty amazing to see how far and wide the distribution of fireworks being shot off were across the valley. More than that however, the video gives a sense of the scale of Fourth of July celebrations in just one part of one American city during 2020's pandemic when events like these were limited. Multiply what the video shows by all the Fourth of July celebrations taking place in towns, cities, and other parts of the country to get a better idea of how big Independence Day still is for Americans.

Have a happy Fourth of July in 2025!

The United States' new home affordability crisis worsened slightly in May 2025, as a higher median new home sale price combined with an increase in the nation's average mortgage rate.

The negative development means the monthly mortgage payment for the median new home sold in the United States once again consumes more than 36% of the pre-tax income of a household earning the median household income. May 2025 represents the 38th consecutive month in which the typical new home sold in the U.S. has been beyond the affordable grasp of the typical American household.

Here are the numbers being that assessment for May 2025. The initial estimate of the median sale price of a new home sold in the U.S. during the month is $426,600. Meanwhile, the 30-year conventional fixed rate mortgage carried an average interest rate of 6.82% during the month. For a household taking out a mortgage with a zero-down payment [1], the principal and interest portion of their mortgage payment would total $2,423.

That mortgage payment would consume about 40.1% of the monthly income earned by a household at the exact middle of the U.S. income distribution in May 2025. As such, it exceeds the upper threshold of affordability that lenders have historically used to determine whether they will loan money to a household that has no other debt. For households that do carry other debt, lenders prefer their monthly mortgage payments consume no more than 28% of their pre-tax household income. Mortgage borrowers have more financial resilience to deal with unexpected expenses when their mortgage payments fall below these affordability thresholds.

The latest update of our chart tracks the changing relative affordability of the typical new home sold in the U.S. is for the typical American household with respect to the mortgage lending industry's key affordability thresholds from January 2000 through May 2025.

Looking ahead to June 2025, the interest rate for the average 30-year conventional fixed rate mortgage held steady at 6.82%, which means borrowing costs remain elevated. With mortgage rates stuck, for the affordability of new homes to improve, one or more of the following two things would need to happen:

• A decline in the price of the median new home sold in the U.S.
• A significant increase in the income earned by the median household.

About the New Home Affordability Crisis

The affordability crisis for new homes has its origin in the high inflation that was unleashed by the Biden-Harris administration's policies in March 2021. Although it rose slowly at first, the cost of monthly mortgage payment began to skyrocket after December 2021. As a percentage of median household income, the monthly mortgage payment for a new home climbed above the key 36% threshold of relative affordability in April 2022, remaining above it in every month since.

Notes

[1] We use the zero-down payment scenario because it provides a simple way to account for the opportunity costs of paying a down payment when buying a new home for many homebuyers. Meanwhile, there are several lending programs for qualified homebuyers that do provide a zero-down payment option to try to make buying a home more affordable.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 25 June 2025. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 25 June 2025. 

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 27 July 2025. Note: Starting from December 2022, the estimated monthly mortgage rate is taken as the average of weekly 30-year conventional mortgage rates recorded during the calendar month.

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a sign advertising a new home for sale with a gasoline pump meter labeled 'MONTHLY MORTGAGE PAYMENT'", which we followed up with a second prompt: "Remove the nozzle and hose from the gas pump. Also change the number in the meter to 2423".

June 2025 was another net-negative month for the dividend paying stocks of the U.S. stock market.

That's based on the dividend metadata compiled for the entire market by Standard & Poor. When we add up all the favorable year-over-year dividend actions like dividend increases, extra dividends and resumptions during the month and then subtract all the unfavorable actions, like announced dividend decreases, the resulting single number that summarizes all the dividend changes of June 2025 is -4.

That's an improvement over the much more negative result we reported for May 2025. While still negative, the underlying data points to a mixed picture for U.S. dividend paying firms. The good news is that fewer firms announced reduced dividends than last month, which was tempered by the bad news of fewer firms announcing dividend rises.

All of June 2024's favorable and unfavorable dividend actions are tallied in the following table, which shows how much they changed since June 2024 (year-over-year) and since May 2025 (month-over-month).

The following chart tracks the monthly counts of dividend increases and decreases from January 2004 through June 2025:

The chart reveals the number of firms announcing decreased dividends in June 2025 remains well below the threshold that indicates recessionary conditions are present within the U.S. economy. However, the more-than-two-year downtrend for dividend increases shown on the chart suggests an ongoing tightening operating environment for firms, which are finding it harder to grow their dividends and, by extension, their businesses.

The next chart shows how the dividend increases and decreases reported during the just-completed 2025-Q2 compares with each of the preceding four quarters:

This chart emphasizes the year-over-year reduction in the number of dividend increases between 2024-Q2 and 2025-Q2.

References

Standard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 1 July 2025.

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull and bear playing a casino game in which a spinning wheel with two halves, one named 'NET POSITIVE' and the other named 'NET NEGATIVE' has settled on the 'NET NEGATIVE' side", which we followed up with a second prompt: "Add a sign labeled 'DIVIDEND METADATA' above the wheel. Also make the picture more colorful."

Motio Research's initial estimate of U.S. median household income in May 2025 is $83,150. This figure is $230 (0.3%) higher than the firm's initial estimate of median household income of $82,920 in April 2025.

These estimates are based on income data collected by the U.S. Census Bureau through its monthly Current Population Survey. This survey is conducted during the week containing the 12th day of the month following the month in which its data applies. The firm then adjusts its monthly estimates to account for the effects of seasonality and inflation in its data, presenting its results in the form of an index with the median household income of January 2010 assigned a value of 100. The initial value of the firm's U.S. Real Median Household Income Index for May 2025 is 116.7.

The following screenshot of Motio Research's interactive chart shows how this index has changed from January 2010 through May 2025:

The firm's U.S. Real Median Household Income Index last peaked in September 2024 and has been in a slowly falling trend in the months since.

Analyst's Notes

Political Calculations also produces estimates of median household income, which complement Motio Research's survey-based monthly estimates. We derive our estimates using aggregate income data produced by the Bureau of Economic Analysis. Our initial estimate of median household income in May 2025 based upon our alternate methodology is $83,445, which is $172 (or 0.2%) higher than our initial April 2025 estimate of $83,273. Our median household income estimate is $295 (or about 0.4%) higher than Motio Research's May 2025 estimate.

The latest update to Political Calculations' chart tracking Median Household Income in the 21st Century shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through May 2025. The inflation-adjusted figures are presented in terms of constant May 2025 U.S. dollars and are not seasonally adjusted, unlike the data used to produce Motio Research's Household Income index:

Political Calculations' monthly median household income estimates are derived from the Bureau of Economic Analysis' monthly aggregate wage and salary estimates for the U.S. population. In May 2025, the BEA's data underwent small revisions, with January (+0.007%) and February (+0.010%) revised upward and March (-0.016%) and April 2025 (-0.055%) revised downward.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 27 June 2025. Accessed: 27 June 2025.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 27 June 2025. Accessed: 27 June 2025.

U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. Not seasonally adjusted. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 11 June 2025. Accessed: 11 June 2025.

Image credit: U.S. Census Bureau. We modified the public domain image to make it more generally applicable beyond reporting the median household income from 2022.

The S&P 500 (Index: SPX) reached a new record high close on Friday, 27 June 2025, almost four months after it last set a new record. The index closed out the trading week at 6,173.10. The index rose 3.4% higher than it finished the preceding week.

The catalyst of the event was the announcement the U.S. and China had reached a trade deal during the week.

It could have been even bigger, but the news that the U.S. suspended trade deal talks with Canada knocked the index below its intraday trading high.

Even so, the S&P 500 muscled its way to a new record close. The latest update of the alternative futures chart finds that as the 2025-Q2 calendar quarter comes to an end, investors are focusing on the more distant future quarter of 2025-Q4 in setting stock prices, with the S&P 500's trajectory running in the lower portion of the forecast range for this quarter:

While the news of the trade deals capped off the week that was, they were far from the only market-moving headlines for the week. The positive outcome of the U.S.' attack on Iranian uranium enrichment facilities over the preceding weekend and the resulting cease fire between the Israel and Iran got the week off to strong start on the geopolitical front. In between that event and the trade-related news on Friday, much attention was given to what the Federal Reserve will be doing with U.S. interest rates in the second half of 2025. Here are the week's market moving headlines:

Monday, 23 June 2025

• Signs and portents for the U.S. economy:
• US attack on Iran adds to economic uncertainty
• Oil settles down 7% after Iran attacks US military base in Qatar, not tankers
• US existing home sales rise in May; mortgage rates still a constraint
• Pressure growing among Fed minions for rate cut:
• Fed's Goolsbee says tariffs have not had expected impact so far
• Fed's Bowman open to cutting rates at July policy meeting
• Fed's Bowman eyes broad set of bank capital reforms
• Fed to no longer police 'reputational risk' in banks
• Fed's Mary Daly says communication should have 'clarity' and 'flexibility'
• Bigger trouble developing in Eurozone:
• French private sector activity contracts further in June, PMI shows
• ECB minions say they'll only engage in bond buying in "exceptional" cases, really want a digital Euro:
• ECB's Nagel says bond-buying is only for exceptional cases
• ECB's Lagarde urges EU lawmakers to speed up digital euro law
• Shares advance, oil prices settle sharply lower as markets shrug off Iran conflict
• Wall Street advanced and oil slid after Qatar intercepted an Iranian attack on a U.S. base

Tuesday, 24 June 2025

• Signs and portents for the U.S. economy:
• Oil prices drop 6% as Israel-Iran ceasefire reduces Middle East supply risk
• Trump says China can buy Iranian oil, urges it to buy US crude
• Trump says US interest rates should be at least two to three points lower
• Fed minions resisting cutting rates, bitterly cling to belief tariffs will cause inflation:
• Powell repeats rate cuts can wait as Fed studies tariff impacts
• Fed's Williams sees slower growth, higher inflation this year on tariffs, uncertainty
• Fed's Schmid says there is time to study tariff effects before rate cuts
• Fed's Collins says modestly restrictive monetary policy is necessary right now
• Fed's Barr: inflation to rise, may see some persistence
• Fed's Hammack sees no imminent need to cut interest rates
• Fed officials are starting to break rank and join Trump
• Trump Slams "Dumb" Fed Chair As Powell Shrugs Off Dovish Colleagues, Reiterates "No Rush" To Cut
• Exclusive: Fed should wait on rate cuts with price hikes expected, Bostic says
• Tariffs were supposed to drive inflation. Why hasn't that happened?
• Tariffs and taxes are not very inflationary
• Bigger trouble, stimulus developing in China:
• Exclusive: Local Chinese governments promote 'zero-mileage' used car exports, inflating sales
• China can maintain high growth and transition to consumer-led economy, premier Li says
• China issues guidelines on financial support for boosting consumption
• BOJ minion still thinking about hiking Japan's interest rates some more as one inflation measure runs hot:
• Hawkish BOJ policymaker signals chance of 'decisive' rate hikes
• Japan's corporate service inflation hits 3.3% in May
• ECB minions say they would do something if faced with a "material" change in Eurozone inflation expectations:
• ECB would react to 'material' changes in inflation outlook, Lane says
• Wall Street surged on Israel-Iran ceasefire, S&P 500 ends less than 1% away from record close
• Nasdaq 100 notches first record high close since February

Wednesday, 25 June 2025

• Signs and portents for the U.S. economy:
• New home sales fall to seven-month low in May; supply increases
• US new vehicle sales set to rise 2.5% in June, report says
• Oil steadies as investors assess Iran-Israel ceasefire, demand outlook
• Outgoing chief Fed minion clings bitterly to belief tariffs will cause inflation, other minions to change rule to make it easier for government to borrow:
• Powell says Fed needs to manage against risk that tariff inflation proves persistent
• Powell calls reports of lavish Fed building renovations inaccurate
• Fed's Powell cautions against ending Fed power to pay interest on reserves
• Trump says he is considering three or four candidates for next Fed chair
• Fed advances plan to ease bank leverage requirements
• Fed Moves To Relax Key Capital Rule For Big Banks To Support Treasury Markets
• Fed hawks and doves: what US central bankers are saying
• Bigger stimulus, US trade deal developing in China:
• China's consumption push will support global growth, Premier Li says
• China takes action on key US fentanyl demands
• Exclusive: US allows ethane to be loaded and shipped to China, but not unloaded, letter says
• Wall Street ended mixed as Iran-Israel ceasefire seems to hold
• Wall Street ends mixed amid cooling Middle East tensions; Powell in focus
• Nvidia hits record high as analyst predicts AI 'Golden Wave'

Thursday, 26 June 2025

• Signs and portents for the U.S. economy:
• Oil rises as draw in US crude stocks signals firm demand
• US labor market softening as more people remain on unemployment rolls
• US demand for China-made goods ebbs on tariff worries; ocean shipping rates drop
• US durable goods orders soar in May on aircraft
• US goods trade deficit widens in May as exports fall
• US first-quarter GDP revised lower on tepid consumer spending
• Fed minions thinking maybe they should cut US interest rates, but not in July 2025:
• Fed rate cut in July? Inside the US central bank, few takers
• Fed's Kashkari expects two rate cuts this year, with pause possible
• Fed's Kashkari says more clarity needed on tariffs' impact on inflation
• Fed's Collins: not enough data by July to decide on a rate cut
• Fed's Barkin says tariffs will start pushing up inflation
• Market bets on a more dovish Fed as Trump eyes Powell's replacement
• Bigger trouble developing in China:
• US demand for China-made goods ebbs on tariff worries; ocean shipping rates drop
• GE Appliances to spend $490 million reshoring production of washing machines from China
• ECB minions using AI to improve their economic forecasts:
• ECB economists improve GDP forecasting with ChatGPT
• Wall Street ended higher as the S&P 500 came up just shy of its all-time trading high

Friday, 27 June 2025

• Signs and portents for the U.S. economy:
• US and China finalize trade deal; White House eyes agreements with 10 key partners, commerce secretary says
• US says deal with Beijing will expedite rare earth exports from China
• Trump cuts off US trade talks with Canada, shattering optimism over tariff deals
• Oil set for steepest weekly decline in two years as risk subsides
• Fed minions plan to spend their summer waiting for data:
• Summertime data to pave way for Fed rate cuts, or further conflict with Trump
• Bigger trouble, stimulus developing in China:
• China's factory activity expected to shrink for third month amid trade tensions: Reuters poll
• China's May industrial profits slip back into sharp decline
• China's central bank pledges to speed up policy response to economic conditions
• BOJ minions react to inflation data telling them to hike rates again by looking for other data that excuses them from hiking rates:
• Core inflation in Japan's capital slows but stays above BOJ target
• In dovish tilt, BOJ zooms in on obscure underlying inflation trends
• ECB minions told they're chasing the wrong inflation target they claim to be on path to hitting:
• ECB should change inflation target, researchers to tell policymakers
• ECB on path to meet its 2% inflation target, ECB's De Guindos Says
• Wall Street ended in the green as the S&P 500 and Nasdaq notched a new record close
• S&P 500 record fueled by earnings strength, easing tariff fear
• Nasdaq Composite hits record high; See Nasdaq-100's 10 best and worst YTD performers
• Safe-haven gold falls 2% on easing US-China trade tensions

The CME Group's FedWatch Tool projects the Fed will continue holding the Federal Funds Rate in a target range of 4.25-4.50% until its 17 September (2025-Q3) meeting, when it is expected to cut the rate by a quarter percent. The FedWatch Tool now anticipates the Fed will keep cutting the FFR a quarter point at a time twice more after that first cut in 2025, on 29 October (2025-Q4) and 10 December (2025-Q4), before slowing to cut rates at 12-week intervals into mid-2026.

The Atlanta Fed's GDPNow tool projection of real GDP growth in the U.S. during the current quarter of 2025-Q2 fell to +2.9% from the +3.4% level recorded a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull celebrating a new record high for the S&P 500, while a Wall Street bear looks worried at a news headline that reads 'GOOD: TRADE DEAL WITH CHINA! BAD: CANADA TRADE TALKS OFF'".