Elliot D. Pollack & Co.
Continuing improvements in the U.S. economy have had a positive effect on the minds and moods of Americans. Economist Mark Zandi noted the economy is creating close to 200,000 jobs per month and full employment is fast approaching. As the country approaches full employment, more are optimistic about the job market than are pessimistic and more are planning on large purchases such as cars and homes than before.
Personal income grew 0.9 percent in the second quarter of 2015, after growing 0.8 percent in the first quarter. Personal income now stands 4.1% higher than a year ago.
Greater Phoenix has seen a 4.6% increase in home prices according to the U.S. S&P/Case-Shiller Home Price Indices.
Initial claims for unemployment insurance increased from the previous week but remains low overall. At 277,000 claims for the week ending September 26th, claims are down 5.1% from a year ago.
Nonfarm payrolls increased by 142,000 in September. That means the U.S. has now recovered 146% from its low point in February 2010 (see chart below). Job gains occurred in health care and information, while employment in mining continued to decline.
The unemployment rate held steady at 5.1% in September.
Consumer confidence is high. The Conference Board Consumer Confidence Index rose to 103 from a revised 101.3 in August. With unemployment continuing to trend downward, more consumers are optimistic about the job market than pessimistic. In addition to the optimism around labor and income, consumers are also willing to spend, with 6.3% planning to buy a new home and 12.7% planning to buy a car, up from 4.4% and 10.8%, respectively.
Personal income increased 0.3% in August and now stands 4.2% above a year ago. Disposable personal income rose by 0.4% last month and now stands 3.6% over a year ago.
The savings rate was 4.6% in August, which is about even compared to previous months.
Construction spending was up on both a month over month and year over year basis in nearly all categories. Total spending is up 0.7% in August over July and 13.7% from a year ago. Both public and private construction activity is higher. In terms of housing, single-family construction spending is up 14% from a year ago and multi-family spending is 24.7% higher than a year ago.
Home prices according to the U.S. S&P/Case-Shiller Home Price Indices are 5% higher than one year ago among the 20-metro composite. Cities in California lead with the highest gains in pricing