As the summer winds down, typically, so does the housing market. But the first readings from August, which came in this week, point to continued growth in housing demand as the year progresses.
On the manufacturing front, Markit’s U.S. manufacturing index grew in August to 57.9 based on strength in new orders in exports and in higher levels of production and employment.
In a similar vein, the closely watched ISM manufacturing composite index increased to 59.0 from 57.1 in July. These two readings show that the manufacturing sector is indeed recovering, and that should bring employment and wage gains down the road.
The rest of the economy is also showing continued improvement, as reflected in the ISM’s non-manufacturing index. That composite rose 0.9 points to 59.6, from 58.7 in July.
Those measures of manufacturing and services led to high expectations on employment metrics for August. But the employment readings were not quite as strong as economists had expected. The initial nonfarm growth in jobs came in at only 142,000, after a 212,000 increase in July and a 267,000 jump in June.
The August reading broke a streak of six months with 200,000+ new jobs, but the long-term trend remains strong, and the growth in employment continues to be in sectors with higher average wages. In addition, average hourly earnings rose 0.2%, as expected.
Finally, mortgage rates remained largely unchanged, at levels lower than one year ago. For those who can qualify, rates continue to be at once-in-a-lifetime levels.
Next week will bring more employment data for August and an initial read on September consumer sentiment.