Following two months of vigorous gains, U.S. employment growth slowed in August. Nonfarm payrolls increased by a lower-than-expected 151,000 for the month after July’s addition of 275,000.
Earnings were soft, up only 0.1 percent month-to-month. The year-over-year is at plus 2.4 percent, down 0.3 percent from July. The unemployment rate remained unchanged at 4.9 percent. The mixed report raises questions on whether or not the Fed will determine the economy is strong enough for an interest rate hike at their next meeting on September 20th.
The Pending Home Sales index made strides in July, up 1.3 percent from June’s downward revised level of 109.9. Pending sales are up 1.4 percent year-over-year. July’s level of 111.3 is the second highest level since February 2006. The index level hit 115.0 in April of this year.
This week in the economy:
- The purchase application index of MBA Mortgage Applications moved up 1 percent in the August 26 while the refinance sector increased 4 percent. Year-over-year purchase applications are only up 5 percent.
- Initial Jobless Claims held at historically low levels in the August 27 week. Initial claims increased only 2,000 higher to 263,000, which is also the 4-week average.
- The Consumer Confidence Index jumped nearly 4 ½ points in August to a level of 101.1. Expectations and present situation components both posted gains, but there was also a 1.3 percent increase in those describing jobs as “hard to get”.
- After reaching the highest reading of the year last week, Bloomberg’s Consumer Comfort Index declined a sharp 1.9 points in the August 28 week, though the index is subject to weekly volatility.
What’s on economic calendar for the week of September 5, 2016:
- Tuesday – Labor Market Conditions Index, Gallup U.S. Consumer Spending Measure
- Wednesday – MBA Mortgage Applications, Gallup U.S. Job Creation Index, JOLTS
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
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