In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses unemployment insurance claims.
- Initial claims for unemployment insurance for the week ending July 21 fell to 353 thousand after a volatile spurt the prior week, based on data released by the Department of Labor. The 4-week moving average, which is less volatile, has been declining over the last 3 weeks after a worrying increase in the second quarter.
- Judging by data since 2004, if claims continue to hover at around the upper 300 thousand, jobs generated will be a shy of 200 thousand and the unemployment rate will continue to hover at around 8 percent. Although still higher than the historical rate, the economy is certainly moving forward although modestly. Job security will remain a major concern for homebuyers, although other mitigating factors such as the continued downtrend in interest rates encourage home-buying.
- In related news, the Census Bureau reported today that new orders for durable goods rose 1.6 percent from May to June. What is interesting is that transportation equipment rose at 8 percent. An increase in consumer durables demand for transportation indicates that consumers are also better positioned to move into other long-term spending such as real estate.
- In summary, today’s data show the economy is in no danger of falling into a fresh recession. But the growth rate is slow. However, incremental net job gains will continue to add to the pool of future homebuyers.