I like to hear good news on a Monday . Who wouldn’t? Today’s good news is the U.S. economy is doing really well, per the latest figures on the gross domestic product (GDP), and unemployment is down.
GDP: Probably the most meaningful measure of economic health. It increased 3.2% on a seasonally adjusted annual basis, which is 0.3% higher than initial estimates. There was greater consumer spending, and although lower inventories pulled the GDP down, it’s a positive that goods are flying off the shelves.
Personal consumption expenditures are up 2.8% and up 0.7% from the initial estimates. Residential investment was also a bit stronger than previously thought and offset by a downward revision for nonresidential investment. Prices were up 1.4% in the quarter, down from the initial estimate of 1.5%.
S&P CoreLogic Case-Shiller HPI: Home prices were up 0.4% in September in the 20-city study. If you take out seasonal adjustments, home values have risen 0.1% and 5.1% on the year. Dallas had the biggest gains, followed by Seattle, Atlanta and Charlotte. For yearly gains, Seattle comes in strongest at 11.1%, while New York brings up the rear with only 1.8% price appreciation.
Consumer confidence is up 6.3 points to 107.1 for the month of November, which is the highest reading since July 2007. The current conditions metric is up 7.2 points to 130.3. More people are saying jobs are plentiful, and the percentage of people saying jobs are hard to get is low, at 21.7%. Not as many people are worried about their future job prospects. Home buying plans are increasing, but vehicle buying plans have fallen a bit. The inflation expectations in this report remain low, down 0.1% to 4.7%.
MBA Mortgage Applications: Overall applications were down 9.4% last week as mortgage rates continue to climb – up to 4.23% on a 30-year fixed-rate mortgage (FRM). Refinance applications were down 16%, and purchase applications were down 0.2%.
Personal Incomes and Outlays: Personal incomes were up 0.6% in the month of October. Wages and salaries were up 0.5%. The savings rate was up 0.3% to 6.0%. Consumer spending was also up 0.3%.
Meanwhile, prices were up 0.2% for the month and 0.1% in core categories – up 1.4% and 1.7% on the year, respectively.
Pending Home Sales Index: Homes under contract only increased by 0.1% in October to an index level of 110.0. Declines in the South wiped out most of the gains everywhere else.
Jobless Claims: New jobless claims were up 17,000 to 268,000, possibly because we’re coming off the Thanksgiving holiday. However, the four-week moving average was only up 500 to 251,500.
Continuing claims came in at 2.081 million, up 38,000 from the week prior. The four-week moving average was at 2.038 million, up 12,750.
ISM Manufacturing Index: Manufacturing levels were up 1.3 points to 53.2. New orders were up 0.9% to 53. Meanwhile, export orders came in at 52.0. Production was up 1.4 points to 56, which, hopefully, means more hiring. Supplier deliveries were up 3.5 points to 55.7. Employment is still at 52.3.
Employment Situation: There were 178,000 jobs added to nonfarm payrolls in November. Private payrolls added 156,000 jobs; the government added 22,000. The length of the average work week stayed steady at 34 hours and 24 minutes. The unemployment rate decreased from 4.9% to 4.6%. Labor force participation was down 0.1% to 62.7%. Wages also fell 0.1%.
Mortgage rates are continuing their post-election ascent. If you’re looking to buy or refinance, the advice is to lock in until further notice.
For the week ending December 1, 30-year FRMs averaged 4.08%, up .05% from last week, with an average 0.5 point. A year ago at this time, 30-year FRMs averaged 3.93%.
This week, 15-year FRMs averaged 3.34%, up from 3.25% last week, with an average 0.5 point. A year ago at this time, 15-year FRMs averaged 3.16%.
With an average 0.4 point, 5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 3.15% this week, up from last week when they averaged 3.12%. A year ago, 5-year ARMs averaged 2.99%.
U.S. stocks were pretty much flat on Friday, as traders waited for the results of a constitutional vote in Italy. In short, Prime Minister Matteo Renzi wants to be able to pass laws with only the approval of the lower house of the Italian parliament. Analysts are worried that if the vote doesn’t pass it could lead to an Italian exit from the European Union.
The Dow Jones Industrial Average fell 21.51 points Friday to 19,170.42. It was up 0.1% for the week. The S&P 500 finished down 0.97% on the week to 2,191.95 and was up just 0.87% of the day. The Nasdaq finished the day at 5,255.65, up 4.55 points but down 2.65% since last Friday’s close.
The Week Ahead
This week’s upcoming reports (and their release times) include the following:
- Tuesday, December 6
International Trade (8:30 a.m. ET) – International trade is composed of merchandise (tangible goods) and services. It’s available by export, import and trade balance for six principal end-use commodity categories and for more than 100 principal Standard International Trade Classification system commodity groupings.
- Wednesday, December 7
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
- Thursday, December 8
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
- Friday, December 9
Consumer Sentiment (10:00 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
This week ahead is a really light week in terms of economic news. And, if economics isn’t your thing, we get it. We have plenty of home, money and life content to pull you out of the Tuesday malaise. Subscribe to the Zing Blog below!
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