Volume 23, Number 43
Reginald J. Smith, Community Development Manager – Bank of Kansas City
Economic Highlights for the Week Ending December 8, 2017
MONDAY, December 4th
For the second month in a row, the CoreLogic home price index rose 0.9% in October from November and was up 7% on an annual basis. Looking ahead, CoreLogic forecasts that house price appreciation will slow in the coming year. Home prices are expected to increase by 4.2 percent on a year-over-year basis from October 2017 to October 2018, and on a month-over-month basis home prices are expected to decrease by 0.2 percent from October 2017 to November 2017.
TUESDAY, December 5th
The international trade deficit widened more than expected in October, increasing to $48.7 billion from a revised $44.9 billion in the prior month. Octobers deficit was the largest since January. A $3.8 billion increase in imports drove the wider deficit, with goods imports gaining $3.5 billion and services imports adding $308 million. Exports held steady from the prior month, with a small increase in services exports offsetting a similarly sized decline in goods exports. The larger deficit strengthens expectations that trade will be a drag on fourth quarter GDP growth.
Service sector activity softened in November, however still shows a strong rate of growth. The ISM non-manufacturing index fell to 57.4% last month from a level of 60.1% in October. Declines stemmed from slower business activity, new orders, and employment. Despite falling in November, the current level of the index shows continued expansion in the service sectors of the economy, as well as solid growth in the broader economy. Fundamentals remain supportive for growth to continue in the non-manufacturing segment going forward.
WEDNESDAY, December 6th
Housing market data have improved recently, suggesting that housing is on a better trajectory heading into next year. The MBA mortgage applications index rose 4.7% in the week ended December 1, more than reversing the 3.1% decline in the prior week. The application index was up 2.4% last week as the refinance index rose 9.0%. Mortgage rates edged lower, with the average interest rate on 30-year fixed-rate conforming mortgages ($424,100 or less) down 1 bps to 4.19%.
THURSDAY, December 7th
Jobless claims fell 2k to 236k for the week ending December 2. The four-week moving average which smoothes out weekly volatility also declined last week, down 750 to 241,500. The low level of claims and declining averages show a labor market that is healthy and running smoothly despite continued disruptions in hurricane affected areas of Puerto Rico and the Virgin Islands.
Outstanding consumer credit surged by $20.5 billion in October following a $19.2 billion gain in September. Revolving credit balances like credit card debt increased by $8.3 billion in October as non-revolving credit, which tracks vehicle financing and student loans, rose $12.2 billion on the month. Revolving credit has been on the rise recently indicating less reluctance among consumers to run up their credit cards which bodes well for the holiday shopping season this year.
FRIDAY, December 8th
Employers added 228,000 new jobs in November after a 244,000 payroll gain in October as the economy shows some year-end momentum. Payroll growth was led by outsized gains of 31,000 manufacturing jobs, 24,000 construction jobs, and 446,000 professional services jobs. Other data details were solid as well. The average workweek was up 1 tenth to 34.5 hours while average hourly earnings rose 0.2% on the month. The tight labor market is leading to a modest acceleration in earnings growth, to 2.5% annually. The labor participation rate remained unchanged on the month at 62.7%, as did the unemployment rate of 4.1%.
Stock Market Close for the Week
A Week Ago
WEEK IN ADVANCE
After a week of mostly housing market related data, reports in the coming week wrap up the sector for the month. Watch for new home sales and pending home sales, both on next week’s calendar. Key Interest Rates Latest 6 Mos Ago 1 Yr Ago Sources: IBC’ s Money Fund Report; Bank Rate Monitor; Federal Home, Loan Bank of San Francisco
Key Interest Rates
6 Mos Ago
1 Yr Ago
Sources: IBC’ s Money Fund Report; Bank Rate Monitor; Federal Home, Loan Bank of San Francisco