Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights jobless claims and the consumer price index.

  • Initial jobless claims again showed volatility last week, ending a period of declines. The claims were up 9,000 to 408,000. But the four-week average fell for the seventh straight week, down 3,500 to 402,500 which is still nearly 20,000 lower than a month ago. The 400,000 level is generally viewed by economists as a point at which the economy is creating more jobs than losing.
  • Continuing claims were up by 7,000 to 3.702 million with the four-week average.
  • The largest increases in initial claims for the week ending August 6 were in California, Texas, North Carolina, Illinois, and Massachusetts while the largest decreases were in Florida, Puerto Rico, Indiana, Oregon, and Kentucky.
  • Assuming that new jobless claims continue to trend down as they were up to this week, NAR expects about 1.5 to 2 million net new jobs in the next 12 months.
  • Separately, consumer price index showed signs of inflation in July primarily driven by increases in gasoline and food prices over the month. The CPI was up 0.5 percent in July. Excluding food and energy, the CPI increased 0.2 percent following a 0.3 percent increase in June. Energy being the biggest driver of the increase was up 2.8 percent following a significant drop in June.
  • Following a similar plunge in June, gasoline increased 4.7 percent in July. Food prices were up 0.4 percent following a similar increase in June. However, within the core index, the price of lodging, jumped 0.9 percent in July, while the apparel index again increased sharply 1.2 percent).
  • The prices for new vehicles were unchanged. However, over the past 12 months, CPI for all items has increased 3.6 percent.  The yearly increase was dominated by a large increase in the shelter index (rent) which reached 1.4 percent in July. On a monthly basis, the cost of rent increased 0.3 percent in July. This is the largest increase since June 2008  as the rent index was largely 0 or 0.1 for the most of the past three years.
  • The inflation pressure on rent is expected to continue, which may force CPI to hit 5 percent. This will exert upward pressure on long-term interest rates in the future.

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