Economic update for the month ending October 31, 2018

U.S. Employers added 250,000 new jobs in October:

Wages grow at fastest pace in almost 10 years – Unemployment remains at lowest rate since 1969 – The Department of Labor Statistics reported Friday that 250,000 new jobs were added in October. That eclipsed the 190,000 new jobs analysts had expected. Job growth has now hit a record of 97 straight months. The unemployment rate was unchanged at 3.7%, the lowest national unemployment rate in 49 years. Average hourly wages were up 3.1% in October from last October. That was the largest year over gain in almost 10 years. 

California employers added 13,200 new jobs in September :

The California Employment Development Department reported that 13,200 new jobs were added in September. California has now added an average of 29,400 new jobs a month for 103 consecutive months. The state’s unemployment rate dropped to 4.1%, the lowest rate on record. 

U.S. stocks saw their largest monthly loss in 10 years in October:

 Although most companies reported quarterly profits that beat or were in line with expectations, the few like Amazon, Square, Hasbro, Domingo’s  and others  that reported disappointing results scared investors. The Dow Jones Industrial Average closed the month at 25,115.76, down from 26,458.31. last month. The S&P 500 closed the month at 2,711.74, down from 2,913.98 on September 30The NASDAQ closed the month at 7,305.90, down from 8,046.35 last month.   

Treasury Bond Yields rise:

The 10-year treasury bond closed the month yielding 3.05%, up from 2.86% on August 31, 2018. The 30-year treasury bond yield ended the month at 3.19%, up from 3.02% at the end of August. 

Mortgage rates higher in October:

 The November 1, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.83%, up from 4.72% on September 27, 2018The 15-year fixed was 4.23%, up  from 4.16% on September 27.  The 5-year ARM was 4.04%, up from 3.97% at the end of September. 

GDP up 3.5% in third quarter:

The U.S. Bureau of Economic Analysis announced that the first reading of the nation’s gross domestic product (GDP) rose by 3.5% in the third quarter of 2018.   That beat expectations of a 3.4% rise, but was well below the 4.2% increase registered in the second quarter of 2018. The report also said that The PCE price index, a key indicator of inflation, rose at a 1.6% annual rate in the quarter. That was well below the 2.2% annual increase analysts forecasted. Consumer spending, which accounts for about two thirds of the U.S. economy grew by 4% in the third quarter. That marked the largest increase since the fourth quarter of 2014. 

September Nationwide Existing Home Sales:

 Data released this week from The National Association of Realtors showed that total existing home sales fell again in September. The number of existing homes sold in September fell 3.4% from August, and are down  4.1%  from one year ago. The median price paid for a home in The U.S. was up 4.2% from last September. That marked the 79th straight month of year over increases. The unsold inventory index is at a 4.4 month supply, up slightly form a 4.2 month supply one year ago. 

September California Existing Home Sales:

The California Association of Realtors reported that existing single family home sales totaled 382,550 in September on a seasonally adjusted annualized rate. That was down 4.3% from August and down a staggering 12.4% from last September, when sales totaled 436,920 on a seasonally adjusted annualized rate. The median price paid for a home in California was $587,850, up 4.2% from September 2017.On a more regional level the median price increased 4.7% in Los Angeles County10.6% in Ventura County, and 3.3% in Orange County from one year ago. Inventory levels continued to rise after hitting historic lows in 2017. The unsold inventory index in California stood at a 4.2 month supply in September, up from a 3.3 month supply in September 2017. Inventory levels have now increased for 6 straight months and are up 20.4% from one year ago. Listings are at the highest level in 31 monthsLos Angeles County has a 4.4 month supply, up from a 3.1 month supply last September. Orange County has a 4.3 month supply,  up  from 3.1 months last September. Ventura County had a 6.3 month supply of homes, up from a 4.7 month supply one year ago. 

Syd Leibovitch 
Rodeo Realty Inc.
9171 Wilshire Blvd. Suite 321
Beverly Hills, California 90210
CA DRE # 00858724

Economic update for the week ending March 19, 2016


Stocks have another strong week – Stocks gained ground for a fifth straight week. Stock markets have now gained back all the losses suffered in the first 6 weeks of 2016. Earlier in the year stocks were pounded by falling energy stocks due to low oil prices. Those stocks have made back their losses as oil prices have rebounded. Benchmark U.S. Crude oil was $39.44 a barrel Friday, up from a 13 year low of $26 on February 11. Higher oil prices help economies in oil producing regions. Better economic conditions lead to higher spending which helps all sectors of the economy. The price of the dollar has also settled and has dropped about 10% after reaching the strongest levels in decades. This helps the outlook of U.S. exports, as a weaker dollar makes U.S. goods cheaper overseas. Other developments have been that reports on manufacturing, hiring, and construction spending have shown that the U.S. economy is still expanding. The Federal Reserve announced at its meeting this week that there will be fewer interest rate hikes this year than they previously expected. This also helped stocks. The Dow Jones Industrial Average closed the week at 17,602.30, up from 17,213.31 last week. The S&P 500 closed the week at 2,049.58, up from 2,022.19 last week. The NASDAQ closed Friday at 4,795.65, up from 4,748.47 last week.

Bond yields drop after inching up over the last few weeks – The 10 year U.S. Treasury bond closed Friday yielding 1.88%, down from 1.98% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.68%, down from 2.75% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Mortgage rates -The Freddie Mac Primary Mortgage Survey released on March 17, 2016 showed that average mortgage were as follows: The 30 year fixed average rate was 3.73%. The 15 year fixed average rate was 2.99%. The 5/1 ARM average was was 2.93%.

California’s unemployment rate falls to 5.5% – California employers’ added 39,900 non-farm jobs in February according to the Employment Development Department. The 5.5% unemployment rate was an 8 year low, continuing a downward trend.

Southern California home sales jump in February – Data firm CoreLogic reported that a total of 15,373 existing Southern California homes and condominiums were sold in February, up 9.1% from 14,096 in February 2015. Month over month the number of existing home and condominium sales were up 5.1% from January. The median price in the region consisting of Ventura, Los Angeles, Orange, Riverside, San Bernardino and San Diego counties was just 3.7% higher than last February, according to CoreLogic.

Have a great weekend!