In this week’s economic review, consumer confidence hits a 17-year high, the Fed leaves rates unchanged, and the unemployment rate fell to a new low.
Case-Shiller Home Price Index
Home prices moved gradually higher in Case-Shiller’s August 20-city adjusted index. The 0.5 percent monthly increased brought the year-over-year rate (+5.9%) to a 3-year high.
Headline consumer confidence made a strong 5.3-point jump in October, landing at 125.9, a 17-year high. Jobs and incomes were the strong factors of the report with just 17.5 percent of respondents saying jobs are difficult to get.
The Federal Reserve
The Fed declined to raise rates at last week’s policy meeting, but following the higher-than-expected first reading of third quarter GDP and economic reports showing little impact from the hurricanes, the Fed’s post-meeting statement firmed expectations for a December rate hike.
While wage inflation eased, payroll growth grew and the unemployment rate continued to decline. Non-farm payrolls increased by 261,000 in the month. Though below expectations, September and August’s upward revisions offset the rebound by 90,000. The unemployment rate fell to a new 17-year low of 4.1 percent.
Average hourly earnings had no monthly change after jumping 0.5 percent in both July and September. The stagnation caused the year-over-year rate to fall back 0.4 percent to +2.4 percent.
This week in the economy:
- Mortgage rates had no change weekly change as of November 2nd. The 30-year average fixed rate was 3.94 percent with 0.5 points, according to Freddie Mac.
- Purchase applications fell a seasonally adjusted 1.0 percent in the week of October 27 after falling 6 percent the week prior. Refinance applications fell 5 percent from the previous week, dropping the refinance share of mortgage activity to 48.7 percent.
- In the week of October 28, initial jobless claims fell 5,000 to a lower-than-expected 229,000. This week’s reading pushed the 4-week average down for the 5th week in a row to a level of 232,500.
- The Bloomberg Consumer Comfort Index increased 0.7 points in the week of October 29, rising to a level of 51.7.
The economic calendar for the week of November 6th, 2017:
- Tuesday – JOLTS
- Wednesday – MBA Mortgage Applications
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Consumer Sentiment
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