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Real Time Insight

When we got a belated jobs report this morning, stocks moved up.

The report showed the U.S. economy gained +148,000 jobs in September.  The unemployment rate moved to 7.2% from 7.3%.  A previously done survey on the non-farm payrolls number looked for a +180,000 rise in September, the most since April 2013.  This was a miss.  Individual estimates ranged from +100,000 to +256,000.  A revised +193,000 gain for August showed up, lifting an earlier prelim number of +165,000.

Looks like another tentative muddle through performance from the jobs market.  And a happy result came from the miss, because it means the Fed stays in the game.  And the shutdown damage wasn't worse.

This September jobs report was delayed by the 16-day shutdown.  It was originally slated for October 4th.  Going forward, jobs market momentum could depend on how quickly the U.S. economy can bounce back from a shutdown that may have trimmed Q4 growth by -0.3%.  Consumer confidence and business optimism also took a hit.
Yesterday, we also got a red flag from the National Association of Realtors (NAR). 
Their September data showed sales of existing U.S. homes fell for the first time in three months.  Purchases dropped -1.9% to a 5.29 million annual rate.  A revised 5.39 million pace was recorded in August, which was the strongest sales pace seen since 2009.
Home affordability is the problem.  The median home price has risen +11.7% from a year ago, increasing to $199,200 from $178,300.  Tack on stagnant growth in personal incomes, and an 80 basis point rise in 30-year fixed mortgage rates.  Put that data into the NAR’s affordability equation, to show the +11.7% price rise pushed home affordability to an almost five-year low. 
The sales slowdown is hitting the first time homebuyer market the hardest. NAR said sales of properties priced at less than $100,000 dropped -7% over the past year.  Those worth $500,000 or more are up +40%.   Next year, the NAR expects another 80 to 100 basis point rise in mortgage rates to keep the pressure on.
My RTI Question: Can This Jobs Markets Master the Headwinds?

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