MetroIntelligence Economic Update by P. DUFFY
Initial unemployment claims dip 6.5 percent to 787,000
In the week ending October 17, initial unemployment claims were 787,000, a decrease of 55,000, or 6.5 percent, from the previous week’s revised level. Continued claims during the week ending October 10 were 8,373,000, a decrease of 1,024,000, or 10.0 percent, from the previous week’s revised level. The total number of people claiming benefits in all programs for the week ending October 3 was 23,150,427, a decrease of 1,046,493, or 4.3 percent, from the previous week.
September existing home sales up 21 percent and prices up 15 percent year-on-year
Existing-home sales grew for the fourth consecutive month in September to a seasonally-adjusted annual rate of 6.54 million – up 9.4 percent from the prior month and nearly 21 percent from one year ago. The median existing-home price was $311,800, almost 15 percent more than in September 2019. Total housing inventory declined from the prior month and one year ago to 1.47 million, enough to last 2.7 months – a record low – at the current sales pace. More than 7 in 10 homes sold in September 2020 – 71 percent – were on the market for less than a month.
New home pending sales index up 2.7 percent in September and 46.9 percent year-on-year
The New Home Pending Sales Index grew 2.7 percent month-over-month and 46.9 percent year-over-year to 170.7 in September, continuing the momentum of the ‘super V’-shaped housing recovery. The strength in the housing market seems nearly universal across different price points, geographies, and demographic cohorts.
Leading Economic Index up 0.7 percent in September and 3.6 percent from March
The Leading Economic Index for the U.S. increased 0.7 percent in September to 107.2 (2016 = 100), following a 1.4 percent increase in August and a 2.0 percent increase in July. The increase in September was driven primarily by declining unemployment claims and rising housing permits. However, the decelerating pace of improvement suggests the US economy could be losing momentum heading into the final quarter of 2020. Furthermore, downside risks to the recovery may be increasing amid rising new cases of COVID-19 and continued labor market weakness.
Federal Reserve Beige Book reports generally optimistic outlook combined with high uncertainty
According to the most recent Beige Book released today on the economy, the Federal Reserve’s various Districts characterized the outlooks of contacts as generally optimistic or positive, but with a considerable degree of uncertainty. Restaurateurs in many Districts expressed concern that cooler weather would slow sales, as they have relied on outdoor dining. Banking contacts in many Districts expressed concern that delinquency rates may rise in coming months, citing various reasons; however, delinquency rates have remained stable.