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This Week in Economic News: September 21 – 25, 2020

September 25, 2020

New Home and Existing Home Sales

New and Existing Homes Reach Highest Levels Since 2006

  • New home sales skyrocketed to a seasonally adjusted annual rate of over 1 million homes – a level not seen since September 2006.
  • Existing home sales jumped to a seasonally adjusted annual rate of 6 million – the highest rate since December 2006.
  • The housing sector overall is experiencing a “V” shaped recovery.

(About Existing Home Sales: Existing home sales measure the amount of sales of previously constructed single-family homes, condos, and co-ops.

About New Home Sales: New home sales measure the amount of sales of newly constructed single-family homes, condos, and co-ops.) 

Durable Goods

New Orders for Durable Goods Extend Growth Streak to Fourth Consecutive Month

  • New durable goods orders increased by nearly $1 billion.
  • Business investment, measured by core capital goods orders, fully rebounded from its pandemic-induced deficit.
  • Business investment grew by 1.8%, beating economists’ expectations of 0.5%.

(About Durable Goods Orders:  Durable goods orders give a sense of the goods production that will take place in the coming months. An increase in goods orders suggests that manufacturing activity must ramp up in order to meet the needs of an increase in consumer demand. Additional workers, hours worked, or overtime may be needed in order to fill those orders.)

Unemployment Insurance

Unemployment Insurance Claims Slightly Slide Downward

  • Combined PUA initial claims and unadjusted state initial claims decreased by over 16,000 claims.
  • For the week ending on September 12, state continuing claims decreased by over 175,000 claims.
  • Persons claiming unemployment insurance benefits in all programs for the week ending on September 5 decreased by over 3.7 million claims.

(About unemployment insurance: Initial claims are new claims by jobless workers who are looking to receive unemployment benefits. Continuing claims are those who continue to receive unemployment benefits because they have not found a job yet. Continuing claims does not count all jobless workers – just jobless workers who are receiving unemployment benefits. There may be jobless workers who do not apply for, are ineligible for, or exhausted all of their unemployment benefits which would not be counted.

Note on PUA: PUA provides for retroactivity to January 27, 2020. State challenges implementing PUA led to significant claims backlogs and backdated claims are included in the continuing claims number. For example, if a jobless worker applied and was determined eligible for eight weeks of PUA benefits, but the state processed those claims on week eight, then a total of 8 claims are counted in week eight for the jobless worker instead of one claim each week. In addition, if an individual was potentially eligible for weeks of PUA benefits during the period the state did not have the program operational, the individual could file for multiple weeks of PUA in the same week. As a result, PUA continuing claims are likely an overcount and exceed the number of individuals actually receiving PUA.)

Coming Up:

Consumer Confidence & Consumer Sentiment

When: Tuesday, September 29, and Friday, October 2, 2020

About Consumer Confidence and Consumer Sentiment: Consumer confidence and consumer sentiment both survey and measure how consumers feel about the current and near-term economy. As consumers become confident, they are more likely to stimulate the economy through consumer spending. When consumers become less confidence or more uncertain about the economy’s future, they will hold back spending which will slow an economy.

ISM Manufacturing Index (PMI)

When: Thursday, October 1, 2020

About ISM PMI: The Institute for Supply Management monthly surveys purchasing and supply executives on the current state of their industries and their contributions to GDP. The results of the survey provide a snapshot of the health of U.S. manufacturing.

Employment Situation

When: Friday, October 2, 2020

About the Employment Situation: The Employment Situation tracks how many jobs were created/lost, the unemployment rate, and wages. This report gives the clearest monthly snapshot of how healthy the economy is doing.