In this week’s economic review, the economy begins to feel the effects of Harvey and Irma, employers are still struggling to find qualified candidates to fill jobs, consumer prices hit a stride, and mortgage rates held steady.
Job openings in the U.S. rose to a record high in July, according to the Job Openings and Labor Turnover Survey (JOLTS). Hiring also increased by 1.3 percent from June, but the increase still doesn’t cover the gap between job openings and hirings, which stands at 669,000. Hirings have trailed job openings for the past several years as employers struggle to find qualified applicants for positions.
Consumer Price Index
For the first time in five months, the consumer price index did not fall below expectations. In August, CPI hit consensus levels with a small 0.4 percent gain or a 0.2 percent gain minus food and energy. Due to Hurricane Harvey, energy costs jumped 2.8 percent with gasoline up 6.3 percent.
Headline sales fell 0.2 percent in August against a 0.1 percent expected increase. Though the Commerce Department didn’t fully attribute the downfall to Hurricane Harvey, weakened auto sales (down 1.6 percent) and increases in gasoline sales (up 2.5 percent) do show a correlation. Both June and July’s retail sales reports were downwardly revised.
The preliminary index for September fell from 95.3 from August’s level of 96.8 with weakness centered in expectations. The expectations component fell 4.3 points to 83.4.
On the other hand, the current conditions component increased a considerable 3 points to 113.9, the best level in nearly 17 years.
This week in the economy:
- Mortgage rates remained at yearly lows as of September 14th. The 30-year fixed rate stands at 3.87% with 0.5 points, according to Freddie Mac.
- Purchase applications increased by 11 percent in the week of September 8th with declining mortgage rates catching the eye of potential home buyers. The refinancing index was also enticed by low rates with the index climbing 9 percent in the week. The refinance share of mortgage activity climbed to another high (51 percent), which is the highest level since January.
- After rising by 50,000 following the aftermath of Harvey, initial jobless claims fell back 14,000 to a level for 284,000. Expect this indicator to remain volatile as jobless claims trickle in from Texas, Florida and surrounding states.
- The Bloomberg Consumer Comfort Index eased in the week of September 10. The index fell 0.7 points to a still-strong 51.9 level.
The economic calendar for the week of September 18th, 2017:
- Monday – Housing Market Index
- Tuesday – Housing Starts, FOMC Meeting Beings
- Wednesday – MBA Mortgage Applications, Existing Home Sales, FOMC Meeting Announcement
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, FHFA House Price Index
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