The Tight Labor Market Remains…Tight: December 27 – 31

Jobless claims fell to another pandemic low. Here are the five things we learned from U.S. economic data released during the week ending December 31 


Initial jobless claims fell to a 52-year low in late December. There were a seasonally adjusted 198,000 first-time claims made for unemployment insurance benefits during the week ending December 25. This was down 8,000 from the prior week and down 74.0 percent from the same week a year ago. The initial claims’ four-week moving average shrank by 7,250 to 199,250. Not only was this 75.8 percent below the year-ago moving average, the Department of Labormeasure has not been this small since October 1969(!). The 2.177 million continuing benefits claims made during the week ending December 11 was 89.4 percent below its year-ago count.

Fewer people signed contracts to purchase a home in November. The National Association of Realtors’ Pending Home Sales Index dropped 2.2 percent during the month to a seasonally adjusted 122.4 (2001=100). The index tracks recently signed contracts for existing homes and was 2.7 percent under its year-ago reading. The index slumped all four Census regions during the month, with the biggest drops in the Midwest (-6.3 percent) and West (-2.2 percent). Declines in the South and Midwest were -0.7 percent and -0.1 percent, respectively. The press release highlighted that homes go from “listed status” to “under contract” on average in 18 days, indicating high housing demand.   

The pace of home price increases slowed slightly in October. The national S&P CoreLogic Case-Shiller Home Price Index grew 1.0 percent on a seasonally adjusted basis during the month. While a huge increase, it declined from September’s 1.2 percent advance. Prices jumped in each of the 20 largest metropolitan areas, including increases greater than 1.0 percent in Atlanta, Charlotte, Dallas, Las Vegas, Los Angeles, Miami, Phoenix, Portland, San Diego, Seattle, and Tampa. The index has risen 19.1 percent in the 12-month period through October. 

Another measure showed accelerating home price gains. The Federal Housing Finance Agency’s (FHFA) House Price Index grew at a seasonally adjusted 1.1 percent in October. The measure, which looks at purchases made with a conforming mortgage, has risen 17.4 percent over the past year. The index gained in eight of nine Census regions—New England was the exception. Prices rose by more than one percent in the Pacific, Mountain, East South Central, Middle Atlantic, South Atlantic regions.   

Agricultural prices rose in November. The Department of Agriculture reports that prices received by farmers jumped 1.9 percent during the month. The same measure has swelled 17.4 percent over the past year. Prices for crops jumped 1.2 percent, while those for livestock surged 2.3 percent. Food producers received higher cattle, corn, soybeans, and milk prices. Prices fell for lettuce, hogs, turkeys, and dry beans. Prices paid by farmers also rose, jumping 0.7 percent in November and up 8.1 percent from a year earlier. 

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

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