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In the News This Week

The Federal Reserve held off on a rate hike at this week’s FOMC meeting, noting that “the pace of job gains slowed and the unemployment rate held steady” and that “inflation has continued to run below the Committee’s longer-run objective, partly reflecting declines in energy prices”. In new language added to the statement, the Fed said it would determine “whether it will be appropriate to raise the target range at its next meeting”.

The economy grew at a slower pace in the third quarter, expanding 1.5% following a 3.9% pace in the second quarter. The slowdown was largely the result of the biggest drawdown in inventories in three years. On the upside, consumer spending rose 3.2%, and spending on durable goods like cars and trucks rose 6.7%.

Pending home sales slipped for the second month in a row in September, falling 2.3% to the second-lowest reading of 2015. According to the National Association of Realtors, “There continues to be a dearth of available listings in the lower end of the market for first–time buyers, and realtors in many areas are reporting stronger competition than what’s normal this time of year because of stubbornly–low inventory conditions. Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait–and–see approach”.

Source: NAHB

Sales of new homes slumped 11.5% in September to an annual pace of 468,000 – the lowest since last November. The supply of new homes available increased to 225,000 – the highest since March 2010. At the current sales pace, it would take 5.8 months to clear the market.

Source: NAHB

Durable goods orders fell for the second month in a row in September, slipping 1.2% after falling 3% the month prior. On the upside, auto orders rebounded 1.8%, otherwise, weakness was widespread.

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