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.

A Job for Almost Everyone Who Wants One!

 By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Job openings at the end of October FELL 2.9 percent from September to just under 6 million, – but were 7.3 percent ahead of a year earlier;
  • The number of hires ROSE 232,000 in October to the highest level of the year, 5,552,000
  • The ratio of unemployed to job opening in October was 1.04 meaning there was just about one job opening for every unemployed person, the lowest ratio since the JOLTS report began in 2000;

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Offering further evidence that the labor is sizzling, the ratio of job openings to available workers fell to its lowest level in the 17-year history of the Job Openings and Labor Turnover Survey the Bureau of Labor Statistics reported Monday.

In the 12 months ending in October, hires totaled 64.3 million and separations totaled 62.2 million, yielding a net employment gain of 2.1 million.

The job openings rate fell to 3.9 in October from 4.0 in September. The rate, according to the BLS, is computed by dividing the number of job openings by the sum of employment and job openings and multiplying that quotient by 100.

Job openings, according to the BLS, increased in accommodation and food services (+94,000), construction (+48,000), and real estate and rental and leasing (+40,000). Job openings decreased in wholesale trade (-90,000), finance and insurance (-47,000), information (-32,000), and nondurable goods manufacturing (-26,000).

The JOLTS report tracks the ins and outs of the labor market as contrasted with the BLS Employment Situation report which reports net changes. Differences can result though as the same individual can be counted in more than one category.

Despite the slight dip in job openings at the end of October, employers added 228,000 jobs in November, the BLS reported last Friday. According to the BLS, a “job opening” means a specific position exists and there is work available for that position, full-time or part-time. The job can be permanent, short-term, or seasonal and there is active recruiting for workers from outside the establishment location that has the opening. Openings for positions with start dates more than 30 days in the future are not included in the job openings count for a specific month.

October hires represented just under 90 percent of the September openings. In the first nine months of the year, hires represented almost 92 percent of prior month openings.

Through October, the US economy was on pace for 64,469,000 hires this year which would be the greatest number of hires since the JOLTS survey began.

You can hear Mark Lieberman on P.O.T.U.S Morning Briefing (Sirius 124) every Friday at 6:20 am Eastern Time. Follow him on Twitter at @foxeconomics.

Economy Adds 228,000 New Jobs in November Earnings Growth Jumps to 3.1%; Unemployment Rate Holds at 4.1%

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Number of payroll jobs INCREASED 228,000 in November;
  • Prior month job totals REVISED DOWN 37,000: DOWN 17,000 in October to a gain of 244,000 (from the initial report of a 261,000 increase) and DOWN 20,000 in September to a revised growth of 18,000 jobs (from 38,000);
  • Average weekly earnings ROSE $4,38 to $915.98, a 3.1 percent year-year gain following a $1.03 decline in October;
  • Unemployment rate FELL in November remained at 4.1 percent, lowest since December 2000 when it was 3.9 percent;
  • The number of persons holding multiple jobs ROSE 135,000 in November suggesting less than half of the new jobs went to people who were unemployed;
  • The labor force (the sum of employed and unemployed) ROSE 148,000 following a 765,000 drop in October;
  • Both employment and unemployment barely INCREASED in November: The number of persons employed ROSE 57,000 and the number unemployed went up 90,000.
  • The number of persons not in the labor force ROSE 35,000;
  • Average workweek ROSE to 34.5 hours, the first increase in the work week since June;
  • Private sector payrolls ROSE 221,000 in November; Government payrolls (federal, state and city) ROSE 7,000 with virtually all the gain coming at the local level;
  • Number of construction jobs INCREASED 24,000, with 15,000 new residential constructions jobs continuing to reflect the rebuild following hurricanes Harvey and Irma
  • Number of retail jobs ROSE almost 19,000 – the strongest month-month growth gain in that sector since January.

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Just as previous reports of employment sector growth require a deeper read than the headline numbers, the Bureau of Labor Statistics report for November may not be all it seems at first blush.

Yes, the report told a tale of 228,000 new payroll jobs in November—the third strongest month-month gain of the 10-month old Trump Administration — but also scaled back the growth previously reported for September and October.

And while reporting 228,000 new jobs, the BLS release also noted the number of multiple jobholders accounted for more than half of the increase.

Perhaps most encouraging was the $4.38 increase in average weekly earnings which means year-over year earnings are up 3.1 percent, the strongest year-year increase since December 2010. Part of the growth in average weekly earnings was a catch-up. Average weekly earnings had declined $1.03 in October.

While the earnings growth is encouraging there were a couple of factors contributing:

  • A relatively low 17.6 percent of total employment was classified as part time, the lowest percentage since October 2008;
  • Leisure and Hospitality jobs – which include restaurant workers –typically the lowest paying jobs added 32,700 jobs only 6.1 percent of the total

The federal reserve’s favorite employment measure: employment ratio or E-POP meaning 39.9 percent of the over-16 population was not working (some because they were in school or unable to work for other reasons). The ratio has dropped from a post-recession peak of 60.5 percent achieved just two months ago.

Even the steady low unemployment of 4.1 percent, matching October for the lowest in almost 17 years, came with an asterisk due to the slow growth of the entire labor force.

The number of persons employed full-time rose to 5.0 percent of the total number employed. There could be positive news in the increase in the average workweek to 34.5 hours which suggests employers might be looking to increase payrolls, or as a flip side may be reluctant to increase staff and instead try to get more out of existing workers.

The BLS report does call into question the need for the massive tax cut under Congressional consideration as an economic stimulus.

The economy has created 1.7 million new jobs in the Trump Administration, so the explanation that we need the tax cut to create jobs may not hold up under scrutiny.

 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 Unemployment Claims Fall Again While Continued Claims Rise Again

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 240,000 1st time claims for unemployment insurance for the week ended November 25, DOWN 2,000 from the prior week;
  • The number of initial claims for the week ended November 18was REVISED UP to 239,000 from the initially reported 238,000;
  • The four-week moving average of first time claims ROSE 2,250 to 241,500, the third straight weekly increase;
  • Four week moving average represented 0.157 percent of employment, UP from 0.155 percent one week earlier;
  • The number of continued claims – reported on a one-week lag – was UP 42,000 for the week ended November 18 to 1,957,000, the highest level since mid-July;
  • The four-week moving average of continuing claims ROSE 18,250 to 1,911,000 – the highest since the end of September

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Continued claims for unemployment insurance took a sharp upward turn in the last full weeks of November surging to a four-month high, the Department of Labor  reported Thursday, puncturing the balloon about strong improvement in the labor market.

Continued claims reflect the ability of those collecting unemployment insurance benefits to get off the rolls, usually by finding a new job. An increase in continued claims suggest finding those jobs has become more difficult.  The four-week moving average of continued claims had fallen in twelve of the 14 weeks ending November 4 but in the next two weeks increased 22,000, just over 1 percent. The actual number of continued claims rose 4.8 percent in that period.

Unemployment claims are historically difficult to track during holiday periods. Last week’s Thanksgiving holiday followed by two weeks the observance of Veterans’ Day. A year ago, in the same two-week period, continued claims rose 100,000. Just over 5 percent.

The uptick in Black Friday sales – which caused retail stock prices to increase – may have those retailers rethinking their decisions to cut back on hiring for the holiday sales season.

Thursday’s claims reports offer further insight into the Employment Situation report for November to be released by the Bureau of Labor Statistics next week. The four-week moving average of initial claims dropped 9,000 from mid-October to mid-November pointing suggesting the unemployment rate may have dropped further in November. The four-week moving average of continued claims though rose 5,750 underscoring payroll job challenges.

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.

 

Pending Home Sales Index Up in October on Increased Activity in the South

Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Association of Realtors’ October Pending Home Sales Index (PHSI) rose 3.5 percent from September to 109.3;
  • PHSI for September was revised down from 106.0 to 105.6;
  • October increase was just the third monthly gain this year
  • Year-year the index was DOWN 0.6 percentage points; the sixth year-year decline in the last seven months

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With a strong boost from hurricanes, the National Association of Realtors’ Pending Home Sales Index (PHSI)  suggested 2017 won’t quite be the washout year for home sales man economists were predicting.

NAR’s PHSI rose 3.5 percent in October, the strongest increase since February. The month-month increase was exaggerated by a downward revision in the PHSI for September which went to 105.6, a decline instead of the originally reported 106.0 which was flat to August. Without the revision, the October increase would have been a still-respectable 3.1 percentage points.

Realtors continue to struggle with weak inventories. The NAR reported earlier this month the number of homes available for sale fell in October for the fifth straight month, down 3.2 percent or 60,000 to 1.8 million; a year ago there were 2.01 million homes for sale. And, the months’ supply of homes for sale in October dropped to 3.9 from 4.2 in September and 4.4 months a year ago.

The inventory was the lowest since NAR began tracking the number of homes for sale in 1999.

Part of the jump in the pending sale index came from a flurry of activity in the South as individuals displaced by hurricane Harvey and Irma went to contract for replacement homes.

The NAR index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. According to the NAR, the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. The October PHSI thus suggests a strong month for closings in December.

Also suggesting closings may pick up at year end, the Federal Open Market Committee is expected to hike the target fed funds rate when it meets December 12-13. Buyers could accelerate closing on homes to get in under the wire before mortgage rates – indirectly influenced by the fed funds rate – go up.

According to the NAR’s own “Profile of Home Buyers and Seller” released last month, homeowners typically stayed in their home for 10 years before selling (an all-time survey high). Prior to 2009, sellers consistently lived in their home for a median of six years before selling.

The index rose 7.4 percentage points in the South in October –the strongest month-month gain on record. The index rose 2.8 percentage points in the Midwest and 0.5 percentage points in the Northeast while slipping 0.7 percentage points in the West.

The South was the only region to show a year-year index gain in October, up 2.0 percentage points.

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.

Case Shiller Home Price Continues Climbing in September

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Case Shiller CoreLogic national Home Price Index IMPROVED in September for the 20th straight month;
  • The 10- and 20-city indices each GREW for the 11th straight month;
  • 10- and 20-city year-year index growth was strongest in more than three years;
  • Index improved in 16 of the 20 cities surveyed in September;
  • Year-year prices were UP in all 20 cities but the year-year increase slowed in four cities.

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Home prices grew again in September according to the monthly Case Shiller CoreLogic Home Price Index released Tuesday, in a report that could be welcome news for inventory-starved realtors.

The national home price index jumped 0.35 percent in September to 195.51, its tenth consecutive monthly record high. The September increase was slower than the 0.47 percent increase recorded in August.

The 10-city index improved 0.48 percent to 217.27 in September, compared with a 0.39 percent gain in August. The 20-city index was up 0.40 percent in September to 203.50. The 20-city index grew 0.39 percent in August.

The market for existing single-family homes has been slowed due to a lack of supply as potential sellers have been reluctant to list their homes despite – or because of – rising prices, with concerns about finding affordable replacement housing.  That prices are increasing could be a double-edged sword for on-the-shelf home sellers who could either be lured into the market or remain on the sidelines hoping for even further price gains.

The National Association of Realtors reported the median price of an existing single-family home fell $5,500 in September, 2.2 percent, to $247,600 as the number of homes for sale fell to 1.86 million the lowest level of the year. The inventory computes to a 4.2-month supply of existing homes for sale.

The historic average of the supply of existing homes for sale is 6.0 months.

Per the Case-Shiller data, prices rose most rapidly in September in Las Vegas (1.0 percent), Tampa and New York (0.9 percent) and Cleveland (0.7 percent).  But the price index fell in Seattle (0.3 percent) and Detroit (0.1 percent) while it was flat in Chicago and Minneapolis.

Regionally, month-month the price index was up 0.7 percent in September in the Northeast, up 0.4 percent in the West, 0.3 percent in the South and 0.1 percent in the Midwest.

Year over year price increases were led by Seattle (12.9 percent), the only city to experience a double-digit percentage increase. Year-year price increases in Denver, Detroit, Seattle and Minneapolis.

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 Sales Again Hit 10-year High

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Pace of contracts for new home sales INCREASED 6.2 percent in October to 685,000 (seasonally Adjusted Annual Rate), the highest level in 10 years (October 2007: 727,000)
  • Sales pace for September was revised down 22,000 to 645,000, with the largest revision, down 27,000 in the hurricane-afflicted South;
  • With faster September sales rate, months’ supply of new homes for sale FELL back to 4.9 percent, the lowest since July 2016;
  • Unsold inventory ROSE 4,000 to August at 282,000
  • Median price of a new home FELL $12,100 from September to $312,800;
  • Year-year the median price of a new home was up $10,000 (3.3 percent)

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Providing rationale for the boost in builder confidence, the pace new home sales rose in October to 685,000, the fastest pace in 10 years the Census Bureau and Department of Housing and Urban Development reported. It was the second straight month the sales pace reached a ten-year high.

The October sales increase included came on the heels of a 14.6 percent increase in September.

The sale rate has jumped over 20 percent in the last two months from an annualized rate of 565,000 in August,

The median price of a new home dropped 3.7 percent ($12,100) in October, nearly wiping out the $13,200 increase recorded in September.

The government report tracks contracts for sale of newly built homes. The sales report from the National Association of Realtors, which reflects resales of homes, showed a modest (2.0 percent) gain in October. The NAR report on contracts for sale (pending home sales) is scheduled for release later this week.

The average rate for a 30-year fixed rate mortgage, according to the weekly Freddie Mac survey, increased from 3.81 percent in September to 3.90 percent in October.

The strong October sales pace will exacerbate home building pressures even as inventories increase. Potential buyers could be looking to lock in mortgage rates before the Federal Open Market Committee meets in two weeks. The FOMC is expected to increase the benchmark federal funds rate by 25 basis points from the current range of ¾ to 1 percent.

Even with the increase in inventories, the government reported earlier this month starts of single-family homes increased 1.9 percent to a seasonally adjusted annual rate of 839,000, the fastest pace since February. Indeed, the “gap” between new home sales and completions fell in October to 108,000 with the rate of completions exceeding sales by 108,000 (SAAR) the narrowest since March 2015.

Builders, according to the Census report on housing starts, increased the pace of multi-family starts in October by 13.9 percent, the sharpest increase in 13 months.

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.

1st Time Unemployment Claims Fall While Continued Claims Rise

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 239,000 1st time claims for unemployment insurance for the week ended November 19, DOWN 10,000 from the prior week;
  • The number of initial claims for the week ended November 11was REVISED DOWN to 249,000 from the initially reported 252,000;
  • The four-week moving average of first time claims ROSE 1250 to 297,750, the third straight weekly increase;
  • Four week moving average represented 0.155 percent of employment, UNCHANGED from one week earlier;
  • The number of continued claims – reported on a one-week lag – was UP 36,000 for the week ended November 11 to 1,804,000, precisely the level of the week ended October 28;
  • The four-week moving average of continuing claims ROSE 1,000 to 1,890,000 – the first increase since the week ended September 9, 2017

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The labor picture remained stable heading into the Thanksgiving holiday with both initial and continued claims bouncing within a narrow range as reported  Wednesday by the Department of Labor. The report’s Thursday release was moved up one day due to the Thanksgiving holiday.

The holiday, as all holidays do, should complicate analysis the claims data as state workers work a short week and are not in place to process even electronic filings.

The report on first-time filings suggests good news in the Employment Situation report to be released by the Bureau of Labor Statistics on December 8. From mid=October to mid-November the four-week moving average of first-time claims dropped 9,250 or 3.7percent. When the four-week moving average fell 7.6 percent a month ago, the unemployment rate fell to 4.1 percent, lowest since December 2000 when it was 3.9 percent.

The indicator for new jobs – continued claims – is reported on a one-week lag so mid-month comparisons are not yet available.

Holiday retail activity, forecast to increase about four percent from last year may show up in revised hiring opportunities for retailers though several major retailers announced plans to scale back or pass on hiring for the holiday shopping season.

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.

 

October Home Sales Jump but Prices Continue Down

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales ROSE 2.0 percent or 110,000 in October to a seasonally adjusted annual sales rate of 5.48 million;
  • The September sales rate was REVISED DOWN 20,000 to 5.37 million;
  • Median price of an existing single-family home FELL 0.2 percent or $600 to $247,000; the fourth consecutive month-month decline though the median price is still up 5.5 percent or $12,900 from October 2016;
  • Year-year the median price has now been UP for 68 straight months – since February 2012.
  • Number of homes available for sale FELL for the fifth straight month, down 3.2 percent or 60,000 to 1.8 million; a year ago there were 2.01 million homes for sale;
  • The months’ supply of homes for sale in October FELL to 3.9 from 4.2 in September and 4.4 months a year ago;

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The housing market picked up steam in October, fueled in part by the fourth straight month of price declines, according to the latest data from the National Association of Realtors (NAR) Tuesday.

No surprise really that sales (closings) went up as prices dropped since so many home buyers make decisions based on the monthly payment. In October, according to Freddie Mac, the average rate for a 30-year, conventional, fixed-rate mortgage rose to 3.90 percent from 3.81 percent in September. The average commitment rate for all of 2016 was 3.65 percent, suggesting buyers with mortgage commitments may have rushed to close before rates went higher. The 110,000 increase in closing (SAAR) was the steepest since March.

That closings may have been accelerated is also supported by back-up data, specifically the NAR’s pending home sales index (PHSI) which tracks contracts for sale, The PHSI for August fell which would have meant a drop in closings two months later (October). The PHSI for September was flat to August so the October closings may reflect a “borrowing” from future closings rather than the beginning of a spurt in home sales.

The fundamentals arguing against an increase in home sales remain unchanged and indeed may have been exacerbated by the tax proposals wending their way through Congress, particularly the proposal to eliminate the deductibility of student loan interest. Millennials already saddled with student loan debt – affecting tests of creditworthiness – will struggle even more to make down payments and cover monthly mortgage obligations.

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.

Builder Confidence Jumps in November to Eight-month High

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Housing Market Index IMPROVED two points in November to 70, its highest level since March;
  • Two of the three index components rose; only the outlook for sales six months out slipped, dropping one point to 77;
  • By region, builder confidence ROSE 25 points in the Northeast to 63, its highest level since October 2005; the index also ROSE in the in the South and West and was unchanged in the Midwest.

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Even without a boost from the storm ravaged South, builder confidence jumped again in November to its second highest level since 2005, the National Association of Home Builders (NAHB)  reported Thursday.

The storms which ravaged Houston and parts of Louisiana as well as Florida appeared to have little impact on the outlook as the confidence improvement was driven by a sharp jump in the Northeast.

The improvement in the index, according to the NAHB, was driven by an increase in demand for new homes. New home sales surged in September according to the latest data from the Census Bureau to the highest level since October 2007.

Builders can expect yet another bump in activity as rebuilding picks up in Florida and Texas in the wake of Harvey and Irma.

Those storms are expected to cause higher prices for both building supplies and labor which would, in turn, drive up the price of a new single-family home. The median price of a new single-family home for the first nine months of this year was $314,656, up 2.5 percent over the same period last year

Two of the three index component improved in the survey, conducted in the first ten days of November. Only the outlook for sales six months forward slipped and that by one point to 77, still a strong reading. The index tracks the outlook for sales in the current month and six months forward as well as buyer traffic. Buyer traffic is the only one of the measures with an index level below 50. According to the NAHB, any number over 50 indicates that more builders view conditions as good than poor.

The index measure for buyer traffic improved to 50 in November.

The Census Bureau and Department of Housing and Urban Development will report tomorrow on new housing permits and starts albeit for October.

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.

1st Time Unemployment Claims Rise While Continued Claims Fall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 249,000 1st time claims for unemployment insurance for the week ended November 11, UP 10,000 from the prior week;
  • The number of initial claims for the week ended November 4 was unchanged at 239,000.
  • The four-week moving average of first time claims ROSE 6,500 to 237,750, the sixth straight weekly decline;
  • Four week moving average represented 0.155 percent of employment, UP from 0.150 percent one week earlier;
  • The number of continued claims – reported on a one-week lag – was DOWN 44,000 for the week ended November 4 to 1,860,000, lowest since December 29, 1973 (1,805,000);
  • The four-week moving average of continuing claims DROPPED 9,000 to 1,887,000 – the lowest since January 12, 1974 (1,881,000).

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The labor picture continues to brighten, despite an unexpected uptick in first time claims for unemployment insurance as reported Thursday by the Department of Labor.

The positive news was the sharp decline in continued claims for unemployment insurance suggesting unemployed workers were getting jobs.

With several major retailers announcing plans to scale back or pass on hiring for the holiday shopping season, if the drop in continued claims does not include retail jobs it could be further good news since retail jobs are among the lowest paying.

The absence of retail opportunities while job prospects appear to be improving for unemployed workers could be a huge positive suggesting their jobs are coming in higher paying sectors.

The week covered by Thursday’s report included Veterans’ Day, federal holiday which was observed on Friday November 10; states have the option of observing it. State holidays typically complicate data collection for unemployment insurance claims so this claims report should be read carefully.

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.