Last Week’s Economic News in Review
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New home sales surged to their highest point in years, while construction spending grew, and layoffs tapered a bit. New Home Sales Sales of new, single-family homes rose to their fastest pace in a decade during October, according to last week’s joint report from the Census Bureau and the Department of Housing and Urban Development. All told, sales rose 6.2 percent over September’s annual rate of 645,000 to hit a pace of 685,000. Compared to last year, this was a whopping 18.7 percent higher than October 2016’s rate of 577,000. Part of the reason for the expansion was a combination of a dwindling supply of existing homes, and the willingness of homebuilders to work with new home buyers. “It would appear that builders paired up with prospective buyers en masse in October to lock in deals that would allow the buyers to have their homes built to order,” Amherst Pierpont Securities Chief Economist Stephen Stanley told the Los Angeles Times. Looking at price, the average price tag of new homes sold during October was $400,200, and the median sales price was $312,800. Looking at inventory, the number of new homes for sale at the end of October was 282,000, which constituted a 4.9-month supply at October’s sales rate. Construction Spending Further exploring home inventory, construction spending during October hit an annual rate of $1.24 trillion, which was 1.4 percent higher than September’s pace of $1.22 trillion, the Census Bureau reported last week. Compared to last year, that was 2.9 percent higher than October 2016’s pace of $1.20 trillion. The four-week moving average, which is considered a more stable measure of jobless claims notched up to 237,750, an increase of 6,500 claims from the preceding week’s average of 231,250 claims. Looking at residential construction, new home construction led a 0.6 percent gain in overall private construction growth during October to hit an annual rate of $517.7 billion, a 0.4 percent increase over September’s rate of $515.4 billion. More specifically, construction spending for single-family homes grew 0.3 percent during the month to hit a rate of $267.2 billion, while spending on multi-family housing contracted by 1.6 percent to decline to $60.9 billion. Initial Jobless Claims First-time claims for unemployment benefits filed by the newly unemployed during the week ending November 25, ticked down to 238,000, a decline of 2,000 claims from the prior week’s total of 240,000, according to last week’s report from the Employment and Training Administration. The four-week moving average, which is considered a more stable measure of jobless claims, notched up to 242,250, an increase of 2,250 claims from the preceding week’s average of 240,000 claims. This latest report marked the 143rd straight week that initial claims have come in below the 300,000-claim level, which economists consider an indicator of a growing job market. The Administration added that hurricane-related reporting difficulties are now isolated to the Virgin Islands. This week, we can expect:
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