Housing, inflation and jobs data highlight a busy week of reports. Look for appreciation data on Tuesday, while Wednesday brings Pending Home Sales and the first estimate of third quarter GDP. The Fed’s favored inflation measure, Personal Consumption Expenditures, will be reported on Thursday.
We’ll also see updates on job openings Tuesday, private payrolls Wednesday, unemployment claims Thursday, and nonfarm payrolls and the unemployment rate Friday.
These Candy Bucket Cookies courtesy of the Food Network are a great way to enjoy leftover Halloween candy. Yields 20 cookies.
Preheat oven to 325 degrees Fahrenheit. Line 2 baking sheets with parchment paper.
In a large bowl, mix 2 cups plus 2 tablespoons all-purpose flour, 1/2 teaspoon baking soda and 1/2 teaspoon salt. In a separate bowl, combine 1 cup packed light brown sugar, 1 1/2 sticks salted butter (melted, then cooled slightly), 1/2 cup granulated sugar, 1 1/2 teaspoons vanilla, 1 large egg and 1 large egg yolk. Add in the dry ingredients and mix until just combined. Fold in 2 cups chopped leftover candy.
Use an ice cream scoop to add dough to prepared baking sheets. Bake until slightly golden and puffy, around 14 to 17 minutes. Cool on a wire rack for 15 minutes, then enjoy.
The Conference Board released their latest Leading Economic Index (LEI), which takes a broad look at the economy and tracks where it’s heading in the near term. September brought a 0.5% drop, which followed August’s 0.3% decline. This report has been negative for 29 out of the last 30 months, with the other month being flat.
What’s the bottom line? “Overall, the LEI continued to signal uncertainty for economic activity ahead and is consistent with The Conference Board expectation for moderate growth at the close of 2024 and into early 2025,” explained Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators.
This correlates with the Fed’s latest Beige Book, which is a survey of economic conditions around the country. The report noted that, “On balance, economic activity was little changed in nearly all districts since early September, though two districts reported modest growth. Reports on consumer spending were mixed, with some districts noting shifts in the composition of purchases, mostly toward less expensive alternatives.”
The number of people filing for unemployment benefits for the first time declined by 15,000 in the latest week, as 227,000 Initial Jobless Claims were reported. Continuing Claims rose by 28,000, with 1.897 million people still receiving benefits after filing their initial claim.
What’s the bottom line? Initial Jobless Claims declined after the recent spike in filings that were due in part to Hurricanes Helene and Milton. However, Continuing Claims remain elevated, as they have now topped 1.8 million for the last 20 weeks and just hit their highest level since November 2021. Employers have clearly slowed down their pace of hiring and people are collecting benefits for longer periods of time.
New Home Sales, which measure signed contracts on new homes, rose 4.1% from August to September, with the 738,000-unit pace reaching the highest level in over a year. Signed contracts were also 6.3% higher than they were in September of last year.
There were 470,000 new homes for sale at the end of September, which was up slightly from 468,000 in August. However, only 108,000 were completed, with the rest either under construction or not even started yet, so more available supply is still needed.
What’s the bottom line? This latest report measures signed contracts in September, so it captured people shopping for homes when rates were lower than they are now. October’s New Home Sales report, which will be released on November 26, could show some weakness, given the recent move higher in rates.
Existing Home Sales, which reflect closings on existing homes, fell for the second straight month in September, down 1% from August and 3.5% from a year ago. The 3.84-million-unit pace represents a 14-year low as NAR’s Chief Economist, Lawrence Yun, noted that “home sales have been essentially stuck at around a four-million-unit pace for the past 12 months.”
Regarding inventory, there were 1.39 million homes available for sale at the end of September, up 1.5% from August and 23% from a year earlier. While this sounds like a big jump, the rise is from very low numbers and inventory remains well below pre-pandemic levels.
Plus, many homes counted in existing inventory are under contract and not truly available for purchase, meaning inventory is even tighter than the reporting implies. In fact, there were only 941,000 “active listings” at the end of last month.
What’s the bottom line? While the number of closings declined in September, some of the internals within the report point to buyer demand.
Homes remained on the market for an average of 28 days in September, and while that’s an increase from 26 days in August, it’s still a relatively short period of time. In addition, 20% of homes sold above list price, showing that there are still bidding wars in about a fifth of sales nationwide. Plus, competition is expected to rise when rates move lower.
All in all, the pent-up demand for homes combined with ongoing tight supply continues to bode well for housing as an investment and continued home price appreciation over time.
These Cranberry Orange Scones courtesy of Allrecipes make for a delicious treat all season long. Yields 12 scones.
Preheat oven to 375 degrees Fahrenheit. In a large bowl, stir together 2 cups all-purpose flour, 1/4 cup packed brown sugar, 1 tablespoon baking powder, 1/4 teaspoon ground nutmeg and 1/4 teaspoon salt. Cut in 1/4 cup butter (chilled and diced) until mixture resembles coarse crumbs. In a separate bowl, toss 1 cup fresh cranberries (roughly chopped) with 1/3 cup sugar. Add to flour mixture along with grated zest of 1 orange and 1/2 cup chopped walnuts. Mix lightly.
In another bowl, beat together 3/4 cup half-and-half and 1 egg. Slowly pour in dry ingredients and mix until dough forms. Knead dough 4 or 5 times, then divide dough in half and turn out onto a lightly floured surface. Shape each half into a 6-inch circle and cut each circle into 6 wedges.
Place scones on lightly greased baking sheets and bake until golden brown, about 20 minutes.
Initial Jobless Claims fell 19,000 in the latest week, with 241,000 people filing for unemployment benefits for the first time. Continuing Claims rose by 9,000, as 1.867 million people are still receiving benefits after filing their initial claim.
What’s the bottom line? Initial Jobless Claims have been volatile in recent weeks, as the hurricanes have caused a spike in filings to the highest levels since July. Though it’s important to note that we’ve seen an uptick in claims among non-hurricane impacted states as well, which points to some weakness in the labor sector.
Meanwhile, Continuing Claims also rose to their highest level since July and are near highs from November 2021. This data continues to suggest that employers have slowed down their pace of hiring, and people are collecting benefits for longer periods of time.
Retail Sales rose 0.4% in September, above the 0.3% gain the market was expecting. The Core reading, which gets plugged into GDP, rose a much stronger than expected 0.7%, which may lead to stronger GDP estimates down the line.
What’s the bottom line? Overall, the sales figures for September show that consumer spending remains resilient, and strong spending is expected to continue this holiday season. The National Retail Federation (the world’s largest retail trade association) has projected that holiday sales are expected to increase between 2.5% and 3.5% compared to last year.
Housing Starts eased from August to September, as the small increase in single-family home building was outweighed by a decline in multi-family projects. We saw a similar pattern in Building Permits, which are the forward-looking indicator for new home inventory. Single-family completions also declined for the month, which will not help on the inventory front.
What’s the bottom line? While builders are feeling more confident about the future, new home construction is still not keeping up with demand. This limited new supply relative to household growth should continue to support home prices.
Easing inflation and the anticipation of falling mortgage rates have led to an improvement in home builder sentiment, per the National Association of Home Builders (NAHB), who reported that their Housing Market Index increased two points to 43 in October.
What’s the bottom line? While home builder confidence remains below 50 in contraction territory, it has risen for two straight months after declining throughout the spring and summer. October also brought improvement in all three index components (buyer traffic, current and future sales expectations). Builders are clearly feeling better about the housing market over the next six months, as future sales expectations jumped 4 points and further into expansion territory above 50. NAHB Chair, Carl Harris, confirmed that “builders are feeling more optimistic about 2025 market conditions.”
National Chocolate Cupcake Day is October 18, but this recipe courtesy of the Food Network is worth enjoying every day of the year. Yields 12 cupcakes.
Preheat oven to 325 degrees Fahrenheit. Line a muffin pan with paper liners.
Cream 1/4 pound unsalted butter (room temperature) and 1 cup sugar until light and fluffy. Add 4 extra-large eggs, 1 at a time. Mix in 1 1/3 cups chocolate syrup and 1 tablespoon pure vanilla extract. Add 1 cup all-purpose flour and 1 teaspoon instant coffee granules and mix until just combined. Do not overmix!
Scoop batter into muffin cups and bake for 30 minutes or until just set in the middle. Cool thoroughly in the pan before removing.
To make the ganache icing, cook 1/2 cup heavy cream, 8 ounces semisweet chocolate chips, and 1/2 teaspoon coffee granules in the top of a double boiler over simmering water until smooth and warm. Dip the tops of the cupcakes into the ganache. Do not refrigerate.
ICE (formerly known as Black Knight) reported that national home values rose 0.12% in August after seasonal adjustments, with their index showing that prices are 3% higher than a year ago, down from 3.6% in the previous report.
What’s the bottom line? ICE is not alone in their findings, as home price gains continue to be reported in other major indexes as well. For instance, Case-Shiller’s latest report (considered the gold standard in tracking changes in residential real estate values) showed that national home values hit another record high in July, with prices 5% higher than a year earlier. The Federal Housing Finance Agency also reported 4.5% annual growth over that same period.
These reports show that homeownership continues to be a great investment for wealth creation.
Initial Jobless Claims were higher than expected in the latest week, rising by 33,000 for a total of 258,000 people filing for unemployment benefits for the first time. Continuing Claims also surged higher by 42,000, as 1.861 million people are still receiving benefits after filing their initial claim.
What’s the bottom line? Initial Jobless Claims tied a high last seen in August 2023, though the spike higher was due in part to elevated filings in states impacted by Hurricane Helene. Hurricane Milton could cause additional elevated filings in the coming weeks.
Meanwhile, Continuing Claims have topped 1.8 million since the start of June, remaining near three-year highs. This data continues to suggest that employers have slowed down their pace of hiring, making it harder for some people to find new employment once they are let go.
The Producer Price Index (PPI), which measures inflation on the wholesale level, was unchanged in September, with the annual reading falling from an upwardly revised 1.9% to 1.8%. Core PPI, which strips out volatile food and energy prices, rose 0.2% for the month and the year-over-year reading moved higher to 2.8%.
What’s the bottom line? While the hotter than expected CPI and PPI readings have caused some fear that inflation is reemerging, we need to look at the numbers in context. September’s 1.8% year-over-year PPI reading is well below the peak of 11.7% seen in 2022. Inflation has made significant progress lower and it’s important to remember that it will not move down in a straight line.