Economic activity continues to ramp up as the nation further eases COVID restrictions and prepares for the upcoming presidential election. Social unrest, the death of Supreme Court Justice Ruth Bader Ginsburg, and concerns over the Coronavirus pandemic continue to remain incredibly important.
Job Gains Increase
The labor market continues to see faster than normal growth as states ease out of their COVID restrictions from the spring and early summer months. In August, over 1.3 million new jobs were added. Job gains were especially massive in government, retail, and professional services. Just to give an idea of how unprecedented that number is, the average monthly reading in 2019 hovered around 200,000.
Unemployment is down from 10.2% to 8.4%. This is significantly below the forecast of 9.8%. Overall, the unemployment rate is down from over 15% in April. However, it remains well above the historic lows of 3.5% from February.
The ISM national manufacturing index is up to 56.0, its highest level since November of 2018. The ISM national services index was up even higher at 56.9. Readings above 50 indicate an expansion within the sector. Both numbers are up from the low 40’s they were at during the early stages of the COVID-19 pandemic.
Recovery in retail remains fairly strong after massive declines during March and April. Retail sales were up 0.6% from July to August and were 3.0% higher than August 2019.
Although economic activity has been gaining steam, overall economic activity is still down from pre-COVID levels. This has caused a significant decline in inflation. The Consumer Price Index (CPI), which is a monthly report on inflation looking at typical goods and services purchased by households, was 1.7% higher than August last of 2019. This is slightly higher than anticipated.
This is up from previous levels of 1.2%, but it remains well below the 2.3% readings from January and February (pre-COVID). Important to note, the inflation rate has had little impact on mortgage rates. Mortgage rates continue to remain low.
Housing Stays Strong
New housing starts in August were down 5% from July which was below forecasts. However, that news is not entirely discouraging. That decline was almost entirely dependent on a 23% decline in multi-family unit starts. These are fairly volatile month over month. On the other hand, single-family starts were up 4% from July and building permits were up 6%. These numbers are much more important hen considering the health of the housing market overall.
Little news has been released by the Fed. Congress continues to debate another COVID stimulus package. However, the closer we get to the November elections, the less likely a new round of stimulus becomes.
Looking ahead, investors are focused on the election as well as the continued social unrest in cities such as Portland, Louisville, Washington D.C., and elsewhere. News regarding the replacement of Supreme Court Justice Ruth Bader Ginsburg remains key as well.
For further information on the real estate industry, get in touch with one of the title and escrow specialists at Plymouth Title Guaranty Corporation.
Information accredited to MBSQuoteline.
Please note: The safety of our staff and clients is our highest priority. Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:
All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office
- If a party to the closing is not feeling well, please contact your closer prior to the closing so appropriate precautions can be taken.
- We ask visitors to utilize the restroom in our building upon arrival to thoroughly wash hands before entering our office.
- Only individuals required to sign and/or deliver documents at closings will be allowed in our office. Specifically, closings will be limited to borrower(s), seller(s), agents, and lenders.
- All pens used in the closing will be given to the client after use.
- All closing rooms will be cleaned and disinfected in-between each closing.
- Those picking up checks at our office will be instructed to call our main line and request to speak to a staff member who will plan for delivery to the lobby or parking lot of our office.
- All staff will refrain from shaking hands before or after closings and ask clients do the same.
Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.