Overview: There was little major economic news over the past week. Mortgage rates increased a bit more, reaching the highest levels in decades.
The most significant economic data this week came primarily from the housing sector, where higher mortgage rates and a low supply of homes on the market continue to restrict activity. Sales of existing homes, which typically make up about 90% of the market, fell slightly in August from July and were 15% lower than last year at this time. Inventory levels remain low, standing at just a 3.3-month supply nationally, far below the roughly 6-month supply that is generally seen in a balanced market, and 14% lower than a year ago. The median existing-home price of $407,100 is 4% higher than last August.
In recent months, the shortage of previously owned homes on the market has been substantially boosting sales of new homes, which account for the remaining 10% of the market under normal conditions. In August, however, new-home sales unexpectedly dropped 9% from July to the lowest level since March. On the positive side, even with the latest weakness, they still were 6% higher than a year ago. Notably, roughly 30% of homes listed for sale are new homes, far out of proportion to their usual much smaller share.
The Department of Labor releases the total number of new claims for unemployment insurance each week, and the latest reading was just 201,000, the lowest since January. This is down significantly from the elevated figures seen during the early months of the pandemic and below even the historically low levels which were typical during 2019. While some other recent economic reports such as job openings have suggested some easing of the tightness in the labor market, the data on jobless claims has remained surprisingly strong.
Existing-Home Sales (millions)
Personal Income and Outlays
Personal Consumption Expenditures (PCE) Price Index
Institute for Supply Management (ISM) Manufacturing Index
ISM Services Index