News & Events

Economic Advisor: October 4, 2017
October 3, 2017


 

New home sales fell, as did consumer confidence and lay-offs, but the reporting agencies noted the recent hurricanes impacted on their numbers.

New Home Sales

New home sales dipped in August, with transactions of single-family homes dropping 3.4 percent to an annual rate of 560,000 from July’s pace of 580,000, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. Compared to the same period last year, August’s sales were 1.2 percent down from August 2016’s rate of 567,000.

Looking at price, the median sales price for new homes in August was $300,200 and the average sales price was $368,100. In terms of supply there were 284,000 new homes for sale at the end of August, representing a 6.1-month supply at August’s sales pace. Housing supply is an important metric because it keeps home prices in check, which in turn helps maintain sales volume.

However, it’s important to note that the Bureau and Department’s joint report stated that Hurricanes Harvey and Irma skewed the August report. “… Information on the sales status at the end of August was collected for only 65 percent of cases in Texas and Florida counties,” the reported read. The report is usually able to collect 95 percent of the data on new home sales.

Consumer Confidence

After brightening in August, consumer confidence dipped in September, with the Consumer Confidence Index falling to 119.8 in September from August’s 120.4, The Conference Board reported last week. The Present Situation Index, which describe how consumers feel about the current state of the economy ticked down from 148.4 to 146.1. The Expectations Index, which measures how consumers feel about the near-term prospects for where the economy is headed was more optimistic, notching up from 101.7 to 102.2. (A baseline of 100 for these measurements was set in 1985.)

While down, the overall outlook is generally positive, noted Lynn Franco, director of economic indicators for The Conference Board, who added that the recent hurricane disasters impacted the September report.

“Confidence in Texas and Florida, however, decreased considerably, as these two states were the most severely impacted by Hurricanes Harvey and Irma. Despite the slight downtick in confidence, consumers’ assessment of current conditions remains quite favorable and their expectations for the short-term suggest the economy will continue expanding at its current pace.”

One aspect of consumer outlook stayed positive and that was how consumers felt about the job market. The percent of consumers expecting more jobs in coming months grew from 16.8 percent in August to 19.5 percent in September. The portion of consumers expecting fewer jobs saw just a short gain, skirting up from 13.2 percent to 13.5 percent.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the newly unemployed during the week ending Sept. 23, dropped to 272,000, a gain of 12,000 claims from the prior week’s total of 260,000, according to last week’s report from the Employment and Training Administration. That said, it is important to note that the Administration noted that the impacts of Hurricanes Harvey and Irma continued to be felt on the jobless claims data.

The hurricane also impacted the four-week moving average, which is usually considered a more stable measure of jobless claims. In this case, the four-week moving average ballooned to 277,750, an atypically large increase of 9,000 claims from the preceding week’s average of 268,750 claims.

Despite the swing in the numbers, this latest report marked the 134th straight week that initial claims have come in below the 300,000-claim level, which economists consider an indicator of a growing job market.

This week, we can expect:

  • Monday – Construction spending for August from the Census Bureau.
  • Tuesday – Car and truck sales for September from the auto manufacturers.
  • Thursday – Initial jobless claims for last week from the Employment and Training Administration; August balance of trade and factory orders for August from the Census Bureau.

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