MetroIntelligence Economic Update by P. DUFFY
Initial unemployment claims dip 8.9 percent to just over 1 million
In the week ending August 22, initial claims were 1,006,000, a decrease of 98,000 from the previous week’s revised level. Continued claims during the week ending August 15 was 14,535,000, a decrease of 223,000 from the previous week’s revised level. The total number of people claiming benefits in all programs for the week ending August 8 was 27,017,232, a decrease of 1,042,323 from the previous week.
Pending home sales up 5.9 percent in July and 15.5 percent year-on-year
The Pending Home Sales Index (PHSI) rose 5.9% to 122.1 in July. Year-over-year, contract signings rose 15.5%. An index of 100 is equal to the level of contract activity in 2001.
Federal Reserve plans to allow higher inflation for longer periods of time
Today’s statement by the Federal Reserve reaffirms the policy board’s long-term commitment to the 2 percent level (measured by personal consumption expenditures), a rate the Fed says promotes price stability, moderate long-term interest rates, and the ability of the FOMC to promote maximum employment including during times of significant economic disruption. In an effort to anchor long-term inflation expectations at the 2 percent mark, the Fed said it judges that following periods when inflation has been running persistently below 2 percent, monetary policy will “likely aim” to achieve inflation “moderately” above 2 percent for “some time”.
31 percent of renters failed to make full August rent, 12 percent of landlords asked for forbearance
Out of 2,919 renters surveyed, 31 percent were not able to pay their full rent in August versus 24.6 percent in July. Due to the increase in partial rent payments, landlords are feeling financial pressure to pay their rental mortgages on time.With inconsistent rent payments due to COVID-19, 12 percent of surveyed landlords went into forbearance. Concerns over renters not being able to pay rent in the future (24.9 percent), as well as trouble paying for their mortgages due to some renters not paying their rent (18.9 percent), were the top reasons landlords gave for going into forbearance.