Can Hiring Master the Headwinds? - Real Time Insight

When we got a belated jobs report this morning, stocks moved up.

The report showed the U.S. economy gained +148,000 jobs in September. The unemployment rate moved to 7.2% from 7.3%. A previously done survey on the non-farm payrolls number looked for a +180,000 rise in September, the most since April 2013. This was a miss. Individual estimates ranged from +100,000 to +256,000. A revised +193,000 gain for August showed up, lifting an earlier prelim number of +165,000.

Looks like another tentative muddle through performance from the jobs market. And a happy result came from the miss, because it means the Fed stays in the game. And the shutdown damage wasn't worse.

This September jobs report was delayed by the 16-day shutdown. It was originally slated for October 4 th. Going forward, jobs market momentum could depend on how quickly the U.S. economy can bounce back from a shutdown that may have trimmed Q4 growth by -0.3%. Consumer confidence and business optimism also took a hit.

Yesterday, we also got a red flag from the National Association of Realtors (NAR).

Their September data showed sales of existing U.S. homes fell for the first time in three months. Purchases dropped -1.9% to a 5.29 million annual rate. A revised 5.39 million pace was recorded in August, which was the strongest sales pace seen since 2009.

Home affordability is the problem. The median home price has risen +11.7% from a year ago, increasing to $199,200 from $178,300. Tack on stagnant growth in personal incomes, and an 80 basis point rise in 30-year fixed mortgage rates. Put that data into the NAR's affordability equation, to show the +11.7% price rise pushed home affordability to an almost five-year low.

The sales slowdown is hitting the first time homebuyer market the hardest. NAR said sales of properties priced at less than $100,000 dropped -7% over the past year. Those worth $500,000 or more are up +40%. Next year, the NAR expects another 80 to 100 basis point rise in mortgage rates to keep the pressure on.

My RTI Question: Can This Jobs Markets Master the Headwinds?

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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