In this week’s economic review, contract signings posted a gain, job creation exceeded expectations, and mortgage rates saw little change.
Pending Home Sales
After falling for three straight months this spring, the June pending home sales index posted a much-needed gain of 1.5 percent. Despite more jobs and an improving economy, contract signings have gained little ground in 2017.
“The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs,” said Lawrence Yun, chief economist of the National Association of Realtors. “Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria.”
Gallup U.S. Job Creation Index
The job market remains strong, according to the Gallup index, with a return to an all-time high level of plus 37. July’s reading marks the third time the index has reached plus 37 in 2017.
In this reading, 47 percent of employees said their company was hiring – the highest percentage for this component since Gallup began tracking it in 2008. Ten percent of employees said their employer was letting workers go, up one point from June.
ADP predicted Friday’s employment report coming in at 178,000, but Friday’s employment report blew past expectations with nonfarm payrolls rising by 209,000 in July. The unemployment rate decreased by 1-tenth to 4.3 percent and the participation increased by 1-tenth to 62.9 percent.
Another strong positive in the report was the 0.3 percent rise in average hourly earnings. Despite the increase, year-over-year average hourly earnings remained at 2.5 percent.
This week in the economy:
- The average 30-year fixed-rate is up 1 basis point as of August 3, landing at 3.93% with 0.5 points, according to Freddie Mac.
- Purchase applications fell a seasonally adjusted 2 percent in the week of July 28, while refinance applications fell 4 percent, according to MBA Mortgage Applications. Despite the week’s decline, purchase applications are up 9 percent from a year ago.
- Initial jobless claims fell by 5,000 in the week of July 29, according to Bloomberg. The 4-week average is down 2,500 to 241,750 even with a spike of 10,000 the week prior.
- The Bloomberg Consumer Comfort Index jumped point higher in the week of July 30, landing at 49.6 – the best reading since June.
The economic calendar for the week of July 31st, 2017:
- Monday – Gallup US Consumer Spending Measure, Labor Market Conditions Index, Consumer Credit
- Tuesday – JOLTS
- Wednesday – MBA Mortgage Applications
- Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
- Friday – Consumer Price Index
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