Friday Market Update for the Week of October 2nd

Happy Friday! Brian Manning here with the weekly update, let’s get right to it!

So, Tuesday this week, we got Case-Shiller. So, Case-Shiller is probably one of the most well-respected data providers for housing information. And in the month of July, we had home appreciation that went up from 4.3% to 4.8%. So, it’s a really strong report and really good to see continual strength in the housing market. Wednesday of this week, and I can’t believe it’s the first Wednesday of every month, which means another month has already gone by, we start to get our jobs data. So the first Wednesday of every month, we get the BLS- I’m sorry, we get ADP. ADP is the largest provider of private payrolls in the US, so these are non-government jobs and for the month of September, ADP said that we have  750,000 jobs created. Pre-COVID, that would’ve been a blockbuster report, but right now it’s pretty decimal.

We also got pending home sales on Wednesday of this week, and pending home sales were on fire. On a month-over-month basis, pending home sales were up 8.8%. On a year-over-year basis, pending home sales were up 24%. This is the strongest number since this data has been collected and since these reports were being created, so just unbelievable.

Thursday of this week we got PCE. So, PCE stands for the Personal Consumption Expenditure. This is the Federal Reserve’s favorite gauge for inflation here in the United States. So, one of the Federal Reserve’s jobs is that they need to moderate inflation. If it starts to get out of control, they will raise rates. So, inflation or the core rate, so the core rate is important because it excludes food and energy. So, food and energy costs are considered volatile items. So if you strip out food and energy, on a month-over-month basis, the core rate for inflation increased by 3/10th of a percent. In addition, the prior month’s report was revised higher and it showed that that increased by 4/10th of a percent. The reason why this is important is because if you look around what’s going on right now, roads are getting busier, there’s more traffic, shopping centers are getting busier. There’s more consumer demand out there, but the unemployment rate is still very high and the supply chains are being challenged So, we’re starting to see cost of goods increasing what that means is that over time, it’s going to put pressure on mortgage rates and mortgage rates will go up as a result of this. So if you’re considering buying a home or refinancing, I’m telling you, right now is rock bottom, it’s the time to do it.

Then today, first Friday of every month, we get the BLS. The BLS is the Bureau of Labor Statistics, this is the government’s report on employment and what happened in the prior months. So in the month of September, the BLS said we have 661,000 new jobs created. The expectation was that there would be 900,000 new jobs, so still a pretty decimal report. Then you see in the news that unemployment went from 8.4% to 7.9% and everyone’s all excited. But they’re really excited for all the wrong reasons. because there was an exodus out of the workplace. 700,000 people left the labor force which is really the primary reason for why we saw this drop in unemployment. It’s not what we’re looking for. So, this is maybe someone that was wanted a full-time job and got part-time, or maybe they just took retirement early. There’s all kinds of reasons why people would leave the labor force that would not be now looking for a job, but 700,000 people. So, if we look at the U6 unemployment rate. So the U6 is kind of the all-in unemployment rate that did show that unemployment went down last month from 14.2% to 12.8%. So it is good but still a 12.8% unemployment rate in the United States, it’s just unbelievable.

And certainly today overshadowing everything right now, is Trump and his wife testing positive for COVID. There’s too many unknowns that are revolving around this Certainly, the stock markets were not loving this, so you’re seeing stock markets just tank right now. Maybe we’ll have a better feedback on our update next week but right now, there’s just too many unknowns to really get into what’s going to happen there.

Quick reminder – Fall Fiesta 6th annual is coming up. October 15th at McDevitt’s Taco Supply, taking place from 5 PM to 8 PM. COVID-safe event, there is two options, there’s a drive through, contact-less meal pickups. So, if you don’t want to get out of your car – no problem. And there’s also in person meal-pickup that’s available as well. We will have live music, it will be a socially-distanced event, masks will be required, we’re super excited because we’re still pulling it off this year.The world is weird but we’re really stoked to make it happen.

Happy Friday, I’m around all weekend, if you have any questions – let me know. Have a great day!