Last Week’s Economic News in Review

Courtesy of Movement Mortgage


A flurry of economic releases crowded last week’s financial headlines as government agencies played catch-up to release back reports that were held up by the federal shutdown, and key among them was the Bureau of Labor Statistics’ employment report for September.The economy added 148,000 non-farm jobs in September, which put the unemployment rate little changed at 7.2 percent for a total of 11.3 million Americans unemployed, the Bureau reported last week.The population of long-term unemployed people — those jobless for 27 weeks or more — hovered at 4.1 million, and comprised 36.9 percent of unemployed Americans. The total of Americans involuntarily employed on a part-time basis — because their hours were cut or they couldn’t find a full-time job — also was unchanged at 7.9 million in September.Turning to the current employment situation, the number of first-time claims for unemployment insurance filed in the week of Oct. 19 dropped to 350,000, a decline of 12,000 claims from the previous week’s revised figure of 362,000, the Employment and Training Administration reported last week. The four-week moving average hit 348,250, a gain of 10,750 from the preceding week’s revised average of 337,500.

The total number of insured unemployed Americans during the week ending Oct. 12 dipped to 2,874,000, a decrease of 8,000 from the preceding week’s revised level of 2,882,000, the Administration also reported. The four-week moving average was 2,894,750, a gain of 13,250 from the previous week’s revised average of 2,881,500.

Another key newsmaker was real estate, with a decline in existing home sales leading the week’s home sales news. Sales of single-family homes, townhomes, condominiums and co-ops, declined 1.9 percent in September to an annual rate of 5.29 million from a downwardly revised 5.39 million in August, the National Association of Realtors reported last week. That said, compared to last year, September’s sales were 10.7 percent over the September 2012’s 4.78 million-unit pace. (Sales have continued to outpace year-ago levels for the past 27 months.)

September’s median price existing homes of all housing types was $199,200, marking an 11.7 percent gain over September 2012. Total housing inventory at the end of September hovered at 2.21 million homes for sale, representing a five-month supply at September’s sales pace. This was slightly up from a 4.9-month supply in August.

Distressed homes, such as foreclosures and short sales, comprised 14 percent of September’s sales, which was up from the record low of 12 percent set in August. Nine percent of September sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in September, while short sales were discounted 12 percent.

Turning to new home sales, the Census Bureau’s long-awaited report on August’s sales showed the month hit an annual rate of 421,000, marking a 7.9 percent gain over July’s revised rate of 390,000, and a 12.6 percent increase over August 2012’s estimate of 374,000.

In terms of price and supply, the median sales price for new houses sold in August ring in at $254,600, and the average sales price was $318,900. The estimated number of new houses for sale at the end of August was 175,000, representing a five-month supply at August’s sales rate.

Construction spending during August notched up to an annual rate of $915.1 billion, a 0.6 percent gain over July’s revised July estimate of $909.4 billion, the Census Bureau also reported. On an annual basis, August’s construction rate marked a 7.1 percent increase over August 2012’s estimate of $854.0 billion.

Spending on private construction hit an annual rate of $640.5 billion in August, which was 0.7 percent over July’s revised estimate of $636.1 billion. Residential construction notched up to an annual rate of $340.2 billion for the month, representing a 1.2 percent increase over July’s revised estimate of $336.2 billion.
This week, depending on how quickly government agencies catch up, we can expect:

  • Monday — September industrial production and capacity utilization from the Federal Reserve.
  • Tuesday — September retail sales and August business inventories from the Census Bureau; September producer price index from the Bureau of Labor Statistics; October consumer confidence from The Conference Board.
  • Wednesday — Third quarter gross domestic product from the Bureau of Economic Analysis; September consumer price index from the Bureau of Labor Statistics.
  • Thursday — Initial jobless claims for the week ending Oct. 26 from the Employment and Training Administration; September personal income and spending from the Bureau of Economic Analysis.
  • Friday — September construction spending from the Census Bureau; October car and truck sales from the automakers.

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