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 discusses jobless claims, the ISM index, and the Beige Book.
- The Thanksgiving week ended with a 6,000 increase in initial jobless claims to 402,000. This increase ends three straight weeks under 400,000. Economists generally suggest that claims below 400,000 indicate expansion of the workforce.
- The smoother, four-week average increased slightly, up a marginal 500 to 395,750. Continuing claims also rose, 35,000 to 3.740 million. The four-week average is up 12,000 to 3.683 million. Assuming new jobless claims stabilize, NAR expects about 1.5 million net new jobs in the next 12 months.
- Separately, good news comes from the manufacturing sector where new orders have increased in November to 56.7. An Index above 50 indicates monthly growth and November is the second month of increased index.
- The ISM composite index is up 1.2 points to a 52.7 level which is the best reading since June. This increase was driven by export orders and for production.
- Also, data for October on construction spending suggests a more than expected advancement of 0.8 percent after a 0.2 percent increase in September. The increase was driven by a 3.4 percent jump in private residential spending. Private nonresidential construction spending also increased, 1.3 percent while public spending fell 1.8 percent.
- In the latest Beige Book released yesterday, economic activity is showing overall improvement but very gradually. All but one Fed District reported increased economic activity. Consumer spending is increasing, particularly for motor vehicles. Manufacturing continues to be strong. Importantly, bank lending is showing some improvement. Nevertheless, hiring is still slow, while wages remained stable and some price pressures have alleviated. Overall residential real estate activity improved, though conditions were mixed across Districts. Residential construction is still slow, with single-family home construction weak and multifamily construction improved in a number of Districts. Commercial real estate markets are generally slow across most of the nation.