Money Talk Podcast, Friday Aug. 25, 2023
Landaas & Company newsletter August edition now available.
Advisors on This Week’s Show
(with Max Hoelzl, engineered by Blake Miller)
Week in Review (Aug. 22-26, 2022)
Significant Economic Indicators & Reports
No significant releases
The real estate market continued to struggle in July as the annual rate of existing home sales sank for the fourth time in five months. The National Association of Realtors said sales were on an annual pace of 4.07 million, down 2.2% from June and 16.6% below the rate in July 2022. The trade association blamed low inventory and high interest rates for choppy sales. Conventional mortgage rates recently reached the highest in more than 20 years. The median sales price was $406,700, up about 2% from the year before.
Though a fraction of the overall market, the annual rate of new home sales rose 4.4% in July, the Commerce Department reported. The pace reached 714,000 houses, which was up 31% from July 2022. The rate was slightly ahead of where it was just before the COVID-19 pandemic. Fewer houses sold for $500,000 or more in July (34% of all sales vs. 46% the year before). The median sales price for a new house fell nearly 9% from July 2022 to $436,700.
The Commerce Department said new orders for durable goods fell in July for the first time in five months. A drop in commitments for commercial aircraft led a 5.2% decline in total orders. Excluding the volatile transportation sector, orders rose 0.5% from June. Overall demand for long-lasting manufactured items was up 4.4% from July 2022 but ahead just 0.5% without transportation. Core capital goods orders, a proxy for business investments, rose 0.1% from June and were 2.3% above of the year before.
The four-week moving average for initial unemployment insurance claims rose for the third week in a row. At 236,750 claims, the average was 35% below the 56-year average, suggesting continued reluctance by employers to let go of workers. The Labor Department reported that 1.8 million Americans claimed jobless benefits in the latest week, up 0.2% from the week before and up from 1.4 million the year before.
The University of Michigan said its consumer sentiment index declined insignificantly in August, as Americans sensed moderating progress on inflation. The survey-based measure was 39% above its all-time low, reached in June 2022. Though still subdued historically, the index hit its second-highest mark in 21 months. Survey respondents suggested a tentative outlook toward the near-term economy and its effects on their personal finances. Economists consider sentiment a bellwether for consumer spending, which drives two-thirds of the U.S. gross domestic product.
MARKET CLOSINGS FOR THE WEEK
- Nasdaq – 13591, up 300 points or 2.3%
- Standard & Poor’s 500 – 4406, up 36 points or 0.8%
- Dow Jones Industrial – 34347, down 154 points or 0.4%
- 10-year U.S. Treasury Note – 5.32%, up 0.07 point