Economy Watch: Economy Creates 169K Jobs in August; Residential Asking Price Peaks; Non-Manufacturing Sector Expands
- Sep 06, 2013
The Bureau of Labor Statistics reported on Friday that the U.S. economy created 169,000 jobs in August, lower than the average increase for the last 12 months, which was 184,000. The increase was fairly broad-based: Employment rose in leisure and hospitality, professional and business services, retail trade, health care, and wholesale trade. The unemployment rate edged down to 7.3 percent.
On Thursday, the U.S. Department of Labor reported that for the week ending August 31, initial unemployment claims were 323,000, a drop of 9,000 from the previous week. The more stable four-week moving average was 328,500, a decrease of 3,000 from the previous week. During much of this summer, initial unemployment claims have been trending relatively low compared with most periods since the recession.
Also on Thursday, Automated Data Processing reported its estimate for private job creation, which came in at 176,000 for August. The company revised its July estimate downward to a little from 200,000 to 198,000. Typically ADP hasn’t been in synch with the official numbers, though in the case it was fairly close.
Residential Asking Price Increases Slowly
The latest positive housing numbers are from Trulia, which reported on Thursday that nationally, asking home prices rose 11 percent nationally year over year in August, and 1.2 percent compared with July. But the data isn’t quite a story of relentless asking price increases: the rise in prices wasn’t quite as fast in the three months ending in August as previous three-month periods. Quarter over quarter, asking home prices rose 3.1 percent in August, down from 3.2 percent in July and 4 percent in April.
“The rate spike since early May has raised the cost of a mortgage by more than 10 percent, but rising rates aren’t the whole story behind the price slowdown,” Jed Kolko, Trulia’s chief economist, said in a statement. “Expanding inventory and declining investor interest have helped cool prices, too. At the same time, mortgage credit has finally started to expand, and the economy continues to strengthen – both of which boost housing demand and offset some of the dampening effect of rising rates.”
Trulia also reported on rents on Thursday. Nationwide rents rose 3.5 percent in August compared with the same month in 2012, jumping 3.9 percent on apartment units but only 1.6 percent on single-family homes. Among the 25 largest U.S. rental markets, rents increased the most in Seattle, Portland, and Miami, while declining slightly in Philadelphia, Washington, D.C., and Sacramento.
Non-Manufacturing Sector Continues to Expand
The Institute for Supply Management’s non-manufacturing index was at 58.6 percent in August, up from 56 percent in July. The organization’s employment Index increased 3.8 percentage points to 57 percent, pointing to growth in employment in the non-manufacturing sector for the 13th consecutive month, according to the ISM.
On Thursday, ahead of the jobs numbers, Wall Street had a tepid up day: the Dow Jones Industrial Average gained 6.61 points, or 0.04 percent. The S&P 500 was up 0.12 percent and the Nasdaq advanced 0.27 percent.