“If you want to be healthy and strong.” (Sesame Street) Economic activity finally hit a healthy level, but other data was weakened by the recent hurricanes.
The final reading on second-quarter Gross Domestic Product (GDP) grew to 3.1 percent, up from the anemic 1.2 percent recorded in the first quarter of 2017, the Bureau of Economic Analysis reported. It was the best reading since the 3.2 percent in the first quarter of 2015. GDP, which is the monetary value of all finished goods and services produced within a country’s borders in a specific time period, was boosted by stronger business and consumer spending.
Inflation continues to run well below the Federal Reserve’s target of 2 percent. Core Personal Consumption Expenditures (PCE), the Fed’s favorite inflation gauge, was 1.3 percent on an annual basis in August, the lowest annual increase since November 2015. Month-over-month, Core PCE was up 0.1 percent from July to August, below the 0.2 percent expected. Core PCE excludes volatile food and energy readings.
In addition to causing devastating damage, Hurricanes Harvey and Irma impacted data reporting for August, the Commerce Department reported, driving new home sales down 3.4 percent from July to a rate of 560,000 annualized units. Sales status was collected for only 65 percent of cases in Texas and Florida counties affected by the hurricanes versus the normal response rate of 95 percent.
In other housing news, the S&P/Case-Shiller 20-City Home Price Index showed a solid increase of 5.8 percent from July 2016 to July 2017.
At this time, home loan rates remain near all-time lows.
The damage and effects of the hurricanes may seep into the September Jobs Report coming this week.
- The ISM Index and ISM Services Index will be released on Monday and Wednesday, respectively.
- The first of two key labor market reports will be released on Wednesday via the ADP National Employment Report.
- As usual, weekly Initial Jobless Claims will be released on Thursday.
- The more closely watched Jobs Report is scheduled for Friday and includes Unemployment Rate, Average Work Week and Hourly Earnings.
If you or someone you know has questions about home loan products or current rates, please contact me. I’d be happy to help.