Initial Claims Continue to Fall

This morning’s initial claims report fell to 860,000. That’s the lowest since the lockdowns started six months ago. Economists had been expecting 875,000. Continuing claims are down to 12.628 million. Things are getting better, albeit very slowly.

Also this morning, the housing starts report for August fell to 1.416 million (that’s the annualized number). That drop was more than expected.

The housing market has outperformed the broader economy despite nearly 30 million people being on unemployment benefits. Unemployment has disproportionately affected low-wage workers, who are typically renters. The 30-year fixed mortgage rate is around an average of 2.86%, according to data from mortgage finance agency Freddie Mac.

Home building last month was pulled down by a 22.7% tumble in starts for the volatile multi-family housing segment to a pace of 395,000 units. But construction of singe-family housing units, which accounts for the largest share of the housing market, increased 4.1% to a rate of 1.021 million units.

Groundbreaking activity rose in the West and Midwest, but fell in the South and Northeast.

Permits for future homebuilding dropped 0.9% to a rate of 1.470 million units in August. Single-family building permits increased 6.0% to a rate of 1.036 million units. Multi-family building permits decreased 14.2% to a rate of 434,000 units.

The market is down today. This is the second time in the last week that the S&P 500 dipped its toe below its 50-DMA.

Posted by on September 17th, 2020 at 11:47 am


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