States continue to slowly reopen their economies. Restaurants and retail stores continue to open at impressive rates, albeit with occupancy restrictions and other COVID regulations in place. Schools have begun to reopen, and the economy as a whole is sitting in a much better place than originally anticipated.
Job Gains Continued
Economic recovery has continued to progress faster than originally expected. In July, the U.S. economy added an impressive 1.8 million jobs, easily surpassing the consensus forecast of 1.5 million. In 2019 the typical monthly job gains was only 200,000.
Overall unemployment rate dropped nearly an entire percentage point from 11.1% to 10.2%, also beating the consensus forecast of 10.5%. Unexpectedly, the average hourly earnings rose throughout the month of July. The figure, which is a strong indicator of wage growth, was 4.8% higher than just a year ago. The Labor Department reported that the strongest growth was in government, hospitality, retail, health care, and the service sector.
The ISM national services index was up to 58.1, above the consensus of 55.0. This is also the highest level since February of 2019. The ISM manufacturing index was also up to 54.2, its highest since March of 2019. Readings over 50 are indicative of an expanding sector.
Retail Rises
June and July were both great months for retail sales after the partial government shutdown in April and May. Retail sales were up 1.2% in July. Electronics, health products, and appliances all saw exceptional success.
The economy is not quite yet back to full force. Consequently, there remains a significant decline in inflation rates. However, there are signals that inflation may be heading back up. The core CPI in July was only 1.6% higher than July 2019. Readings during the partial shutdown hovered near 2.0%.
Housing Market Shines
July and August were once again great for the housing market. In July, sales of existing homes were up a whopping 25% from June, putting sales at the highest level since 2006. The median home price was also up 9% from July 2019.
A shortage of available homes on the market put constraints on July’s success, but the numbers remained impressive. Total inventory of existing homes is just hardly over a 3-month supply. This falls well below the 6-month supply standard considered a healthy market balance. Additionally, existing home inventory was 21% lower than July 2019.
New housing starts, however, were up 23% from June. That was the largest growth new housing starts has seen since 2016. Applications for new permits to build was also up 19%, its biggest jump since 1990. Overall, the National Association of Home Builders housing index had builder confidence up to 78 from 72 for July, which matches the all-time high from 1998.
Looking Ahead
Investors will continue to keep their eyes on any government stimulus package down the road. Congress has been in discussion about new levels of relief, however little action has taken place.
Investors will continue to eye Fed policy changes and phased reopening plans across the country. Additionally, advances are being made on the medical side of things. Any vaccine announcement would be great news for the U.S. economy.
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.