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Weekly Economic Update | Week Ending August 26, 2023

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Economic news this week focused around the Fed’s annual international symposium. Central banks from around the world as well as U.S. Fed Chairman Jerome Powell reiterated their intent to do whatever it takes to bring inflation down to their 1% target. Powell pretty much stated that further increases would be necessary, as growth has exceeded expectations. He spoke about the tight labor market being a major cause of inflation. He said that we won’t reach the target at the current unemployment level, and the need to get the unemployment rate higher. It is currently at the lowest level in over 50 years. That appears to be a target that the Fed will be focusing on when they set monetary policy. The Dow Jones Industrial Average closed the week at 34,346.90 down 0.5% from34,500.66 last week. It is up 3.6% year-to-date. The S&P 500 closed the week at 4,405.71, up 0.8% from 4,369.71 last week. It is up 14.7% year-to-date. The Nasdaq closed the week at 13,590.65, up 2.3% from 13,290.78 last week. It is up 29.8% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.25% almost unchanged from 4.26% last week. The 30-year treasury bond yield ended the week at 4.30%, down slightly from 4.38% last week. We watch bond yields because mortgage rates follow bond yields.

Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of August 24, 2023, were as follows: The 30-year fixed mortgage rate was 7.24%, up from 7.09% last week. The 15-year fixed was 6.55% up from 6.46% last week.

U.S. existing-home sales – The National Association of Realtors reported that existing-home sales totaled 4.07 million units on a seasonally adjusted annualized rate in July, down 16.6% from an annualized rate of 4.88 million in July 2022. The median price for a home in the U.S. in July was $406,700, up 1.9 from $413,800 one year ago. There was a 3.3-month supply of homes for sale in July, up from a 3.2-month supply last July. First-time buyers accounted for 30%of all sales. Investors and second-home purchases accounted for 16% of all sales. All-cash purchases accounted for 26% of all sales. Foreclosures and short sales accounted for 1% of all sales.

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Economic update for the month ending September 30, 2018

Economic update for the month ending September 30, 2018

U.S. Economy adds 134,000 new jobs in September – Unemployment rate dropped to the lowest level since 1969:

U.S. Department of Labor
U.S. Department of Labor

The Department of Labor Statistics reported that U. S. employers added 134,000 new jobs in September. That was below the 185,000 that analysts had estimated, yet even though job creation fell to its lowest level in a year the unemployment rate dropped to its lowest level in 49 years. The national unemployment rate in September was 3.7%, down from 3.9% in August. Average hourly wages rose 2.8% year over year from last September. That was slightly lower than last month when average hourly wages increased 2.9% from last August.

California employers add 44,800 new jobs in August:

The California Employment Development Department reported that 44,800 new jobs were added in August. The unemployment rate held steady at a record low of 4.2%, down from 4.6% last August. Average hourly wages  grew 3.1% year over year, their largest year over year increase since last October. Los Angeles and Orange County average hourly earnings grew 5.4% from last August. 

 Stock Market Update:

NYSE-NEW YORK, NY

The Dow Jones Industrial Average closed the month at 26,458.31, down from 25,964.62 last month. It is up 7% year to date. The S&P 500 closed the month at 2,913.98, down from 2,901.52 on August 31 It’s up 9% year to date. The NASDAQ closed the month at 8,046.35, down from 8,109.54 last month. It’s up 16% year to date.

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 September: 

The September 27, 2018 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.72%, up from 4.52% on August 30, 2018. The 15-year fixed was 4.16%, up  from 3.97% in August 30. The 5-year ARM was 3.97%, up from 3.85% last month.

Consumer Confidence at highest level hits 18 year high in September:

The U.S. Consumer Confidence Index hit its highest level since 2000 this week according to data from the Conference Board’s September survey.

New home sales rebound in August:

The Commerce Department reported that sales of new homes increased 3.6% in August from July on a seasonally adjusted annualized rate. Year over year the number of new homes sold in August increased 12.7% from August 2017. The median price paid for a new home increased 1.9% from one year ago.

California existing home sales numbers drop in August – Prices continue to rise:

The California Association of Realtors reported this week that the number of existing home sales dropped in August to a seasonally adjusted annualized rate of 399,600. It was the fourth straight month of sales declines and the first time in over two years that the number of existing home sales dropped below the benchmark 400,000 level. The median price of a home in California rose to $596,410, up 6.6% from August 2017. On a regional basis the Los Angeles County median price rose 6.4%, Orange County rose 6,3%, and Ventura County rose 3.1% from last August. Housing inventory levels rose 17.2% from one year ago, the fifth straight month of housing supply increases. The unsold inventory index in August was a 3.3 month supply of homes listed for sale, up from 2.9 months in August 2017.

U.S. existing home sales:

The National Association of Realtors reported that total existing home sales equaled 5.34 million on a seasonally annualized rate, down 1.5% from August 2017. The nation wide median price grew 4.6% in August compared to one year ago marking the 78th straight month of year over year increases in the median price. Total housing inventory also increased. There was a 4.3 month supply of active listings in August, up from a 4.1 month supply in August 2017.

Have a great week!

-Syd

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