Labor Day Economic Snapshot
Given the level of political instability throughout this year and the heartbreaking disaster unfolding along the Gulf shore, it’s remarkable that the economy has chugged along as well as it has. Here’s a look at some of the latest key economic indicators for a pre-fall check up on the economy.
Today’s headline indicator is the August jobs report, with reports saying the U.S. added 156,000 new jobs during August, nudging the unemployment rate slightly higher, but still healthy and a very tight labor market at 4.4 percent. Five is generally considered full employment, so many employers in a variety of sectors are seeing ongoing trouble finding qualified candidates for their open positions.
According to the latest jobs numbers, construction, manufacturing, professional and business services, and education and health services are the biggest drivers of economic growth in recent months.
From Fannie Mae comes another, very positive indicator—the number of mortgages in serious delinquency declined once again in July, finally below 1 percent for the first time since the early days of the Great Recession. Housing continues to be a primary driver of economic growth, but has also lead to massive price increases in most large cities, which is straining budgets from coast to coast.
The National Association of Realtors bolsters that news, with its latest report showing pending home sales fell less than a percent in July. Pending sales decreased the most in the South, while expanding in the West. All regions are below where they were at this time last year, underscoring the limited supply in most metros.
On the happy consumers front, personal income increased 0.4 percent in July, while spending grew by 0.3 percent, as reported by the Bureau of Economic Analysis. These numbers have been on the rise since this time in 2009, and should be a very positive sign for restaurants and retailers looking forward to the upcoming Christmas-fueled season.
With the fourth-largest U.S. city still almost completely submerged, and many surrounding areas still crippled, this storm and its aftermath will undoubtedly have massive impacts on the larger economy, starting most visibly with gas prices that have begun rising. Expect to see significant, lasting effects that have hardly begun.
In the meantime, travel safely and do something to help those impacted in Texas. It’s amazing how many in the franchise community (and beyond) are stepping up. We could all use a little compassion these days.