No Harvey Impact yet but 1st Time Unemployment Insurance Claims Rise

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 236,000 1st time claims for unemployment insurance for the week ended August 27, 1,000 MORE than the previous week;
  • The number of initial claims for the week ended August 19 was UNCHANGED at 232,000;
  • The four-week moving average of first time claims FELL 1,250 to 236,750 or 0.154 percent of total employment;
  • The number of continued claims – reported on a one-week lag – for the week ended August 19 was 1,942,000, a decline of 12,000 from the previous week’s unrevised number;
  • The four-week moving average of continuing claims DROPPED 6,250 to 1,951,500;

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The increase in first time claims for unemployment insurance for the week ended August 26, as the Department of Labor reported Thursday is just a tease as to what this report will look like in a few weeks.

If history is any guide, we can probably expect unemployment insurance claims to jump by about 100,000, In 2005, about two weeks after Hurricane Katrina ravaged Louisiana (and, not, internet rumors notwithstanding Barack Obama was not president then), initial claims which had been averaging about 320,000 per week, spiked by 96.000 and then dropped 65,000 two weeks later. Claims returned to their pre-storm average within two months.

President Obama was in the White House when Superstorm Sandy tore up the East Coast in 2012, sending first-time claims up 90,000 two weeks later.

Just as Harvey’s impact on employment will be transitory, so too will be impact of the storm be on gasoline prices, affected because it hit a refinery-rich part of the country. Analysts expect a 15¢ jump in the per gallon price of gasoline in the next couple of weeks but prices should be back to pre-storm levels in a couple of weeks.  Platforms and rigs were shut down in anticipation of the storm, which made landfall late Friday as a Category 4 storm but weakened mid-Saturday into a tropical storm. Following Katrina, gasoline prices shot up 40¢ per gallon within a month but then fell back to below pre-storm levels two months later.

Thursday’s data on claims will have no impact on the Bureau of Labor Statistics’ report Friday on the August labor market. The unemployment rate is expected to remain at 4.3 percent and non-farm payrolls to increase about 182,000 which would be below the July increase of 209,000 and the three-month average increase of 195,000.

Average hourly earnings are expected to increase 6¢ to $26.42 which would compute to a 2.6 percent annual increase and average weekly earnings are expected to slip $3.59 to $905.83 which would be 2.6 percent higher than August 2016.

You can hear Mark Lieberman tomorrow (Friday Sep. 1) at 8:45 am and again at 12:05 pm on POTUS Sirius XM 124 and every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Unemployment Rate Drops to 4.5% in March as Job and Earnings Growth Stall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Unemployment rate FELL in March to 4.5 percent, the lowest rate in almost 10 years (May 2007);
  • Payroll jobs INCREASED 98,000 in March, the weakest job growth since last May;
  • Prior month job totals were revised down: February from a gain of 235,000 to a gain of 219,000 and January from a gain of 238,000 to an increase of 216,000 jobs;
  • Private sector payrolls rose 89,000 in March, also the weakest growth since last May;
  • Average weekly hours in March FELL to 34.3, the lowest since last November;
  • Average weekly earnings INCREASED in March to $896.60 — up $1.77 from February but the 2.4 percent year-year growth was slightly weaker than the 2.5 percent annual growth recorded in February;
  • Average hourly earnings ROSE 5¢ in March to $26.14, a 2.7 percent year-year jump; in February average, hourly earnings registered a 2.8 percent year-year improvement;
  • The number of full-time workers INCREASED 326,000 in February; the number of part-time workers ROSE 149,000;
  • Labor force participation rate HELD at 63.0 percent;
  • Employment-Population ratio ROSE to 60.1 percent, the highest level since February 2009;
  • The number of multiple jobholder went UP 138,000; multiple jobholders represent 5.2 percent of all employed individuals, up from 5.1 percent in February;

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Despite the lowest unemployment rate in almost 10 years, this has to be considered a disappointing Employment Situation report, with the weakest job growth in 10 months and downward revisions to the job totals reported for the first two months of the Trump Administration. The revisions to January and February job growth trimmed the number of new jobs by 38,000.

So, what happened?

Some of the changes can be attributed simply to the calendar as the number of retail jobs fell marking the official end of the holiday shopping season. Some too relates to the weather with 6,000 new construction jobs in March, down from the addition of 15,000 in February.

Unusually good winter weather in the Midwest and Northeast probably strengthened job growth in January and February. March was payback time.,

Offsetting the drop in retail jobs, the number of restaurant jobs grew 21,700. Restaurant jobs have been a steady source of job growth having increased for 57 consecutive months. But, those jobs remain among the lowest paying jobs.

The health care sector too remained a strong source of new jobs, adding 16,700 jobs in March, the 54th straight month of job growth. The health care sector, of course, dodged a bullet when the House cancelled a vote on a replacement for the Affordable Care Act. Since the ACA took effect, the number of health care jobs has increased by 1.5 million or just over 39,000 per month.

Wage growth, though up in March appears to be slowing slightly. Coupled with the dip in average weekly hours, it means workers have less, not more, money in their pockets. Indeed, the slight drop in weekly hours is a bad omen for future hiring. An increase in hours would mean employers have to add to staff. In the immediate aftermath of the onset of the Great Recession, hours fell below 34, dropping as low as 33.8.

Average weekly earnings fell in the construction, and manufacturing sectors. The construction sector is one of the highest paying industry sectors with average weekly earnings of $1,039.77, topped only by the utilities sector ($1,5550.86) and the mining and logging sector ($1,262.69). Manufacturing workers earned an average of $864.84 per week in March, down $2.04 from February. Construction worker earnings fell $6.97 a week in March.

The weakness in hours and the mild slowing in wage growth suggest a weaker labor market than we’d like to see but there also seems to be little basis for concern about inflationary pressures.

The overall job growth should be tempered by the increase of 138,000 multiple jobholders.

The drop in the unemployment rate though remains the redeeming factor in this report. The number of persons unemployed fell 326,000 to 7.2 million, the lowest level since September 2007. Delving into that number, the number of individuals unemployed because of layoffs dropped 190,000 in March and the number of individuals unemployed for fewer than five week dropped 232,000. Some of those could have left that bracket and are now unemployed for 5-14 weeks, but that category fell 29,000. Together that suggest that new entrants to the ranks of the unemployed don’t remain there very long.

Unemployment rates for sub-categories also showed improvement. The unemployment rate for blacks dipped to a still high 8.0 percent from 8.1 percent in February and the unemployment rate for Hispanics dropped 0.5 percent to 5.1 percent. Even the teenage unemployment rate was down, dropping 1.3 percentage points to 13.7 percent, the lowest it has been since May 2001 when it stood at 13.4 percent.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124.

You can follow Mark Lieberman on Twitter at @foxeconomics.

 

1st Time Jobless Claims Remain Highly Volatile, Falling 10,000 in Last Week

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • 1st time claims for unemployment insurance for the week ended December 3 FELL 10,000 to 258,000;
  • The number of claims for the week ended November 28 was unchanged at 268,000
  • Filings remained under 300,000 for the 92nd straight week, the longest streak since 1970;
  • Four week moving average of first time claims INCREASED 1,000 to 252,500;
  • The four week moving average represented 0.166 percent of total employment, UP .001 percentage points from a week earlier;
  • Continuing claims for the week ended November 28 – reported on a one-week lag – DECREASED 79,000 – largest week-week drop since July 2015 — to 2,005,000;
  • The number of continuing claims for the week ended November 21 was REVISED UP 3,000 to 2,084.000;
  • Four-week moving average of continuing claims FELL 9,500 to 2,028,750;

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First time claims for unemployment insurance remained extremely volatile as the calendar turned to December, with a five-figure swing for the fifth straight week, according to the Labor Department.

The average change (regardless of direction) for the last five weeks has been 15,400 compared 6,600 for the previous five weeks. To be sure, the net change has been a drop of 7,000 claims over the last five weeks, but the wide swings suggest some instability in labor markets which would call into question the wisdom of tinkering with interest rates in the short term. Nonetheless, “body language” from the Federal Open Market Committee – the federal Reserve Board’s policy-setting arm – suggest the FOMC is poised to lower the target fed funds rate when it convenes next Tuesday. Though widely anticipated, the FOMC action could our a damper on holiday sales. Retailers had been anticipating strong sales, up about 3.6 percent, according to the National Retail Federation (NRF).

The NRF estimated retailers would add between 640,000 and 690,000 jobs to deal with the increased sales volume for the holiday season which, according to NRF, covers all of November and December.

The four week moving average, designed to smooth the volatility of the weekly numbers, is showing less of a swing in the last five weeks ranging from an increase of 1,000 to a drop of 6,000 and a net decline of 5,250 for the period dropping the total to 252,500, 6.7 percent below the level a year ago.

Despite the recent volatility, both initial claims and continuing claims have been on a relatively stable downward trajectory over the past year. Continuing claims, often seen as a surrogate for hiring, are down 10.7 percent from a year ago. The four-week moving average of continuing claims has dropped a more modest7.1 percent.

In raw numbers, continuing claims fell 241,000 in the last year with most of that decline, 137,000, since September 1.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Unemployment insurance Claims Jump to 2-plus Year High

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 252,000 1st-time claims for unemployment insurance for the week ended December 7, 2019, an INCREASE of49,000from the previous week’s unrevised 203,000;
  • The four-week moving average of initial claims ROSE 6,250 to 224,000;
  • Four-week moving average represented 0.141 percent of employment, UP from 0.139 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,667,000 for the week ended November 30, DOWN 31,000 from the previous week’s UPWARDLY REVISED 1,698,000 (from 1,693,000)
  • The four-week moving average of continued claims FELL 6,250 to 1,676,000.

Trends:

  • The surge in the number of first-time claims was the largest since the number of first-time claims soared 61,000 for the week ended August 28, 2017
  • The number of first-time claims rose to the highest level since the week ended September 25, 2017;
  • The four-week moving average of initial claims rose to its highest since May;

Data Source: Department of Labor

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Just one week after initial claims for unemployment insurance fell to the lowest level since April, first-time claims soared to the highest reading in more than two years, the Labor Department reported Thursday.

There were no external factors such as storms or labor unrest which might have led to the surge which was likely more related to the calendar. Weekly claims data are highly volatile in the best of times, even more so this week which reflected a later-than-usual Thanksgiving holiday. During holiday periods displaced workers can file claims electronically even as government workers who process them may take vacation.

Claim filings this year have been rocked by weather and the California wildfires which led to temporary jumps in the readings followed closely by a sizable decline suggesting no long-term negative labor trend. Even continued claims – which reflect previous claimants who remain on unemployment rolls—have not shown any sustained increase which would suggest difficulty in securing new employment.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

Unemployment insurance Claims Drop to 7-Month Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 203,000 1st-time claims for unemployment insurance for the week ended November 30, 2019, a DECREASE of10,000from the previous week’s unrevised 213,000;
  • The four-week moving average of initial claims FELL 2,000 to 217,750;
  • Four-week moving average represented 0.139 percent of employment, DOWN from 0.140 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,693,000 for the week ended November 23, UP 51,000 from the previous week’s UPWARDLY REVISED 1,642,000 (from 1,640,000)
  • The four-week moving average of continued claims was UNCHANGED at 1,681,000.

Trends:

  • The number of first-time claims fell for the second straight week. The two-week drop of 25,000 was the largest two-week decline since initial claims fell 40,000 in the two weeks ended September 16, 2017;
  • The number of first-time claims fell to the lowest level since April (193,000);
  • The 51,000 jump in continued claims was the largest since claims jumped 54,000 in February of this year;
  • The four-week moving average of continued claims has dropped only once in the last nine weeks.

Data Source: Department of Labor

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Initial claims for unemployment insurance fell to the lowest level since April for the week ended November 30, the Labor Department reported Thursday.

While certainly a positive sign for the cranky labor market, the numbers were likely affected by the Thanksgiving holiday, with government bureaucrats who process claims enjoying a four-day weekend. Even as claims may have been filed electronically, final processing would have been delayed.

The report of initial claims will have no impact on the Employment Situation release scheduled for Friday but mid-month comparisons, along with the monthly report from payroll processor ADP suggest the jobs report for November may show some weakness.

From mid-October to mid-November, the number of initial claims rose 10,000 and the four-week moving average of first-time claims rose 5,500. Both mid-month measures increased for the first time in more than seven years when it resulted in a sharp drop in the number of people employed (although the unemployment rate remained unchanged).

The mid-month claims data as well are complicated by the recently settled UAW strike which led to a sharp jump in unemployment insurance claims in mid-November.

Forecasters are braced for relatively weak jobs numbers on the heels of Wednesday’s ADP report which showed an increase of 67,000 private-sector jobs in November compared with a monthly average of 160,000 for the first 10 months of the year.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics. 7

Pending Home Sales Index Falls Despite Lower Mortgage Rates

Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Association of Realtors’ Pending Home Sales Index (PHSI) FELL 1.7 percentage points in October to 106.7;
  • The September PHSI was revised down to 108.6 from 108.7
  • Year-year the index ROSE 4.5 percentage points.

Trends:

  • The PHSI decline was only the fourth this year;
  • Year-year the Index has risen three months in a row for the first time since July 2016-March 2017.

Data Source: National Association of Realtors (NAR

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With mortgage rates remaining low the National Association of Realtors Pending Home Sales fell in October for just the second time in the last six months.

The NAR’s report came as Freddie Mac ‘s weekly mortgage survey showed the average rate for a 30-year fixed rate loan rose to 3.69 percent from 3.61 percent in September, still at historically low levels.

The dip in the index – which measures contracts for sale, not closings — tracked the government’s new home sales report – which also measures contracts for sale – of a 0.7 percent decline in new home sales in October.

And like the new home sales report, the PHSI is up sharply from 2018. The October 2018 pending home sales index was 102.7. The pace of new home sales in October, according to the Census Bureau Department of Housing and Urban Development report, was 31.5 percent higher than October 2018.

Sales contracts for existing homes fell in three of the four Census regions in October, improving in only the Northeast while the PHSI was up in the Midwest and West in October but down in the Northeast and South.

The dip in the PHSI in October pointed to a downturn in closed sales in December. When the PHSI rose 1.4 percentage points in August, completed sales, closings, rose 1.9 percent in October.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

Continued Unemployment Insurance Claims Fall to 46-Year Low;

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 213,000 1st-time claims for unemployment insurance for the week ended November 23, 2019, a DECREASE of15,000from the previous week’s upwardly revised 228,000 (from 227,000);
  • The four-week moving average of initial claims FELL 1.500 to 219,750;
  • Four-week moving average represented 0.140 percent of employment, UP from 0.138 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,640,000 for the week ended November 16, DOWN 57,000 from the previous week’s UPWARDLY REVISED 1,697,000 (from 1,695,000)
  • The four-week moving average of continued claims FELL to 1,680,500 from 1,693,500.

Trends:

  • The week-week decline in first-time claims for unemployment insurance was the largest since the week ended May 11;
  • The level of continued claims was the lowest since the week ended August 4, 1973, just over 46 years ago;
  • The decline in continued claims for unemployment insurance was the largest since the week ended April 6;
  • The four-week moving average of continued claims rose for the first time in eight weeks.

Data Source: Department of Labor

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First-time claims fell sharply in the week ended November 23, but the “headline” shifted to continued claims which dropped to a 46-year low.

Continued claims counts individuals who had previously filed claims and continue to receive them. They are often seen as a surrogate for hiring since getting a job is one of only three ways to stop collecting unemployment benefits – along with benefits expiring or becoming ineligible for payments.

The dramatic drop in continued claims suggests the Employment Situation release December 6 could include a surprise boost in payrolls. From mid-October to mid-November, continued claims for unemployment insurance fell 43,000 but the four-week moving average of continued claims rose 3,000, dampening expectations somewhat.

One of the factors contributing to the prior weeks’ increases in first-time unemployment claims was the wildfires in California but those forced layoffs appear to have abated just as recent rains have slowed the spread of fires.

According to the Labor Department, an industry review of initial claims (on a one-week lag) suggested new concerns in the construction sector with the four states reporting an increase of 1,000 or more first time claims – Illinois, Louisiana, Michigan and Minnesota – all citing higher layoffs in the construction sector.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Home Prices Edge Up in September Per Case Shiller Index

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Case Shiller CoreLogic indices ROSE ever so slightly in September;
  • The 10-city index IMPROVED 0.3 percent, the 20-city index was UP 0.7 percent and the National Index ROSE 0.12 percent
  • Year-year the 10-city index was UP 1.5 percent, the 20-city index ROSE 2.1 percent and the National index IMPROVED 3.2 percent in September;
  • Year-year the price growth slowed in seven cities in September compared with ten in August.

Trends:

  • The three indices have gone eight months in a row without dropping (the 10-city index was flat from August to September).
  • The price index ROSE in 13 cities in September up from 11 in August;
  • The price index ROSE for the 21st straight month in Miami while falling for the third straight month in San Francisco and Washington DC.

Data Source: S&P Case Shiller/Core Logic

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Home prices rose by the slimmest of margins in September according the monthly Case Shiller-CoreLogic home price index produced by Standard & Poor’s.

The increases were slightly ahead of price rises recorded in August, breaking a string of four months in which while prices continued to increase, each increase was slower than the month before.

The slower price growth combined with near-record low mortgage interest rates failed to significantly boost sales of existing single-family homes, exacerbating a weak housing market.

According to the Case Shiller data, price increases in its national index averaged 0.46 percent per month in the first nine months of this year, down slightly from 0.53 percent in the same period a year ago. The slow price increases have led potential sellers – particularly empty-nesters – to keep homes off the market bringing the inventory of homes for sale down. In the first 10 months of this year, the average monthly inventory of homes for sale is down from the same period a year ago.

The decline would be larger were it not for a fall in mortgage interest rates.

According to the National Association of Realtors, sales of existing single-family homes fell 2.5 percent in September even as the price of an existing single-family home dropped for the third straight month.

The Case Shiller report showed a distinct geographic bent with prices falling in three of the four Census regions, rising only in the South and there by only 0.2.

The sharpest increase in September came in Tampa (up 0.7 percent) followed by Cleveland, Los Angeles and Phoenix (up 0.5 percent each). The largest month-month decrease was in Chicago (0.7 percent) followed by San Francisco (down 0.6 percent).

Year-year, price increases were led by Phoenix (up 6.0 percent) followed by Charlotte (up 4.6 percent), Tampa (up 4.5 percent) and Atlanta (up 4.0 percent).

Hear Mark Lieberman this Friday on P.O.T.U.S. radio’s Morning Briefing, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

New Home Prices Rise; October Slip

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Pace of contracts for new home sales EDGED DOWN 0.7 percent in October to a seasonally adjusted annual rate (SAAR) of 733,000;
  • The September sales pace originally reported as 701,000 was REVISED UP to 737,000
  • The inventory of unsold new homes ROSE 1,000 in October to 322,000;
  • The months’ supply of new homes for sale ROSE to 5.3 in October from 5.2 in September;
  • Median price of a new home RECOVERED to $316,700 in October, up $6,500 after falling $16,500 in September;
  • Year-year the median price of a new home is DOWN 3.5 percent or $11,600.

Trends:

  • The sales pace for new single-family homes is up a sharp 31.6 percent year-year;
  • Though up in October, the median price of a new single-family home has fallen in eight of the first 10 months of this year;
  • The number of homes for sale is at its second lowest level since August 2018

Data Source: Census Bureau and Department of Housing and Urban Development

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Sales of new single-family homes remained up from 2018 even as prices rose, the Census Bureau and Department of Housing and Urban Development reported Tuesday. Even with the October increase, the median price of a new single-family home remained below 2018 levels as it has for most of this year.

That the pace of sales slipped in October was a function of a significant revision to the September sales pace which was revised up from 701,000 to 737,000. Still the higher number may not reflect eventual sales since this government report measures contracts for sale, not actual closings. The parallel report on existing home sales, that is pending home sales, is expected from the National Association of Realtors Wednesday.

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the October reading of 737,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The year-year jump in new home sales is in part attributable to rebuilding in the South in the wake of storm damage. In the last five months the year-year increase in new home sales in the South has averaged 28 percent compared with about 5 percent in the Northeast, a 1.7 percent decline in the Midwest and an increase of 14.6 percent in the West.

That said, homebuilding is looking somewhat rosier with the recent Census-HUD report on housing permits and starts. According to the government, the pace single-family home permits rose 3.2 percent in October – the sixth consecutive monthly increase – and single-family starts rose 2 percent in October, up for the fifth straight month and the eighth month-month increase this year.

Hear Mark Lieberman on P.O.T.U.S. (Sirius-XM 124) Friday at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

Existing Home Sales Revive in October on Low Interest Rates

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales – ROSE percent, 100,000, in October to a seasonally adjusted annual sales rate of 5.46 million;
  • Sales pace for September was revised down 20,000 to 5.46 million, increasing the drop for September to 2.5 percent from the originally reported 2,2 percent;
  • Median price of an existing single-family home FELL 0.2 percent, $600, to $270,900;
  • Year-year the median price is up 6.2 percent or $15,800;
  • Number of homes available for sale FELL 2.7 percent to 1.77 million;
  • The months’ supply of homes for sale in September FELL 0.2 months to 3.9 months.

Trends:

  • The October increase in the pace of closings was the third in the last four months;
  • Year-year sales were UP for the fourth consecutive month;
  • The median price of an existing single-family home FELL for the fourth straight month, down just over 5 percent in that stretch;
  • The inventory of homes for sale dropped for the fourth straight month; the months’ supply of homes for sale fell to the lowest level since March.

Data Source: National Association of Realtors: (NAR)

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Homebuyers continued to shop by monthly payment, bargaining for lower prices even as mortgage interest rates remained near historic lows in October.

The average rate for a 30-year fixed rate mortgage was 3.69 percent in October, only a tad above the 3.61 percent average in September. Even with the decline in the median home price, the interest rate increase would bump the average mortgage payment (principal and interest) to $1,245.38 from $1,235.89 (about $9.49).

While this report is a positive in that sales improved, the increase in sales was weak. Sales have increased in six of the first 10 months this year with the average increase for the other five months about 3.6 percent, almost twice the October boost.

And the drop in the inventory of homes for sale, threatens sales for the rest of the year when homebuying typically falls off. The expected drop in closings for the balance of the year would have a negative impact on sales at furniture and appliance stores.

The four-month decline in the median price of an existing home matches a streak in the middle of last year though in 2018, home sales themselves fell despite the lower prices; interest rates were almost a full point higher.

According to the NAR, first-time buyers accounted for 31 percent of October closings, down from 33 percent in September, underscoring the concerns of younger families about homebuying. The homeownership percentage of those under 35has averaged 36.4 percent this year, barely above the 36.3 percent last year.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

1st-time Unemployment Insurance Claims Steady but Elevated

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 227,000 1st-time claims for unemployment insurance for the week ended November 16, 2019, UNCHANGED from the previous week’s upwardly revised 227,000 (from 225,000);
  • The four-week moving average of initial claims INCREASED 3,500 to 221,000;
  • Four-week moving average represented 0.141 percent of employment, UP from 0.139 percentage one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,695,000 for the week ended November 16, UP 3,000 from the previous week’s UPWARDLY REVISED 1,692,000 (from 1,683,000)
  • The four-week moving average of continued claims ROSE 3,000 to 1,693,000.

Trends:

  • The four-week moving average of first-time claims for unemployment insurance ROSE for the third straight week;
  • The number of continued claims was unchanged year-year and has not dropped year-year for seven straight weeks;
  • The four-week moving average of continued claims has increased for seven straight weeks for the first time since the beginning of this year.

Data Source: Department of Labor

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First-time claims for unemployment insurance continued to inch up signaling further unrest in labor markets. (Technically claims for the week ended November 16 were unchanged from the previous week but the prior numbers had been revised upward.)

The absolute numbers remain low by historical standards (the historic low is 162,000 first-time claims for the week ended November 30, 1968 – representing about 0.21 percent of total employment – 50 percent higher than today). The weekly Labor Department report continues to reflect a weakness in the labor market with the increase in continued claims suggesting those collecting unemployment benefits are unable to find jobs.

The Labor Department report also hinted the unemployment rate could rise slightly when the Employment Situation report for November is released December 6.

From mid-October to mid-November, corresponding to the “reference” week used in determining the unemployment rate, first-time claims for unemployment insurance rose 9,000 – the largest mid-month to mid-month increase since April-May – and the four-week moving average rose 5,250. When those two metrics rose in April-May there were small increases in the unemployment rate. The unemployment rate rose to 3.6 percent in October from 3.5 percent in September.

On a one-week lag, the Labor Department reported the largest increases in initial claims for the week ending November 9 were in California (+6,484), New Jersey (+5,197), New York (+2,721), Texas (+2,532), and Minnesota (+2,117), while the largest decreases were in Colorado (-794), Arkansas (-458), Montana (-188), Vermont (-27), and Arizona (-14).

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Housing Permits Hit 12-year High in October

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homebuilding activity, measured by housing permits and starts ROSE 5 percent in October with permits hitting a post-Recession high
  • Permits and starts data for September were revised upward, slightly reducing the October increase;
  • The seasonally adjusted annual rate of total starts ROSE 3.8 percent or 48,000 to1.31 million;
  • Starts for new single-family homes ROSE 2.0 percent or 18,000 to 936,000;
  • The rate of total housing completions ROSE 117,000 or 10.3 percent in October;
  • The SAAR of single-family completions ROSE 4.5 percent or 39,000.

Trends:

  • Total permit activity for rose to the highest level since May 2007;
  • Single-family permit activity rose to its highest level since August 2007;
  • Single-family housing starts were up year-year for the fifth straight month for the first time since early 2018.

 Data Source: Census Bureau and Department of Housing and Urban Development

Image result for homebuilding industry

Single-family homebuilding moved higher in October reinforcing solid builder confidence levels according to the Census Bureau and Department of Housing and Urban Development.

The HUD-Census report offers a new narrative for the housing sector but doesn’t immediately reverse sluggish sales of both new and existing single-family homes even as the median price of a new single- family home dropped in September (latest data) to a 31-month low.  (The report on October new home sales and prices is scheduled for release next Tuesday.)

The uptick in both permits and starts comes as good news for construction employment which has grown just 0.5 percent since the beginning of the year compared with 3.6 percent growth in the first 10 months last year. According to the most recent Job Openings and Labor Turnover Survey data, the number of construction job openings rose 6.7 percent in September (most recent data).

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Builder Confidence Edges Down in November; Remains Solid

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index SLIPPED one point in November to 70 (out of 100);
  • The outlook for sales in the near term fell two points to 76 and buyer traffic dipped one point to 53;
  • Despite the modest decline, the index of buyer traffic was above 50 – the dividing line between optimism and pessimism – for the fourth straight month
  • By region, builder confidence ROSE in three of the four Census regions, slipping only in the South where ot was down two points to a still-solid 74.

Trends:

  • The month-month decline in the total index was only the second in 2019; the index fell two points to 64 in July;
  • The outlook for sales six months out is at its highest level since HMI is up 10 points since November 2018, the largest year-year gain since May 2017;
  • The year-to-date average index reading is 65, down from the year to date average of 68 last year.

Data Source: National Association of Home Builders (NAHB)

Image result for home building

Builder confidence remained solid in November despite a one-point slip to 70 (out of 100), the National Association of Home Builders reported Monday. The index has been over the break-even point, 50, for more than five years.

That said, the overall numbers for home construction continue to struggle against the sentiment measure. The pace of housing permits has fallen four times in the first nine months of the year (data for October is scheduled for release tomorrow), and the rate of housing starts has fallen in five of the first nine months of the year. (The pace of single-family starts though has increased seven times in the first nine months of 2019.)

Despite the improvement in single-family home starts in 2019 – the pace of starts fell in five of the 12 months in 2018), new home sales continue to struggle – down in four of the first nine months this year and the median price of a new single-family home fell to a 31-month low in September.

The number of residential construction jobs, according to the Bureau of Labor Statistics, grew 1.9 percent in the last year after growing 5.3 percent one year earlier.

A significant contributor to builder optimism assuredly is continued low -interest rates.

Year-to-date, the rate on a 30-year fixed-rate mortgage has averaged 3.97 percent, down ½ a percentage point from 4.53 percent a year ago. Last week, Freddie Mac reported, the average rate for a 30-year-fixed-rate loans was 3.75 percent down from 4.94 percent a year ago.

Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @ foxeconomics.