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What You May Have Missed
Hello Wanda,
Between traveling and enjoying some time with your loved ones, the last developments in the economic world may not have been top of mind in the past couple of weeks. Here are some of the numbers you may have missed.
Home price growth finally slowed down in September. However, this deceleration was primarily due to the (already) elevated price tags and assorted high mortgage rates. According to the S&P CoreLogic Case-Shiller House-Price Index, September home prices in the 20 major U.S. metropolitan markets were up 0.4% from August and 4.6% compared to September 2023. This is a step down from an annual increase of 5.2% the previous month. Nationwide, home prices rose 0.3% in September and were up 3.9% over the past year. “Home price growth stalled in the third quarter, after a steady start to 2024,” according to Brian D. Luke, Head of Real Estate Assets at S&P Dow Jones Indices.
The Federal Housing Finance Agency (FHFA) reported that home prices were up by 0.7% in September compared with the previous month and up 4.3% in the past year. The median price for existing homes was $406,700 and $426,300 for new construction homes. “While house prices continued to increase because housing demand outpaced the locked-in housing supply, elevated house prices and mortgage rates likely contributed to the slowdown in price growth,” said Anju Vajja, Deputy Director of the Division of Research and Statistics at the FHFA.
Cooling Economy
The heated housing market is not the only element showing signs of slowing down. The Job Openings and Labor Turnover Survey, or JOLTS report, released by the Labor Department showed that U.S. job openings increased solidly in October while layoffs dropped by the most since April 2023, suggesting a re-balancing of the job market. There were 1.11 job openings for every unemployed person in October, up from 1.08 in September, below the 1.2 that prevailed before the COVID-19 pandemic.
Nevertheless, the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, increased 0.2% in October and showed a 12-month inflation rate of 2.3%. These numbers align with expectations but above the 2.1% level in September and the 2% targeted by the Fed. The so-called Core Inflation, which excludes the more volatile prices of food and energy, came in hot with a 0.3% increase on a monthly basis and an annual reading of 2.8%.
While the Fed is still expected to proceed with a 25 bps interest rate cut at its next meeting on December 17-18, future decisions will rely heavily on incoming data. "We're on a path to a more neutral stance ... We're just going to have to see where the data lead us ... I'm not ruling (December) out or in," said Fed Chair Jerome Powell.
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