Minnesota Mortgage Blog

Spending by Americans outpaced their savings and income during September, according to figures released by the Bureau of Economic Analysis last week. Personal income increased by 0.1 percent over August to $17.3 billion, as did disposable personal income, which increased by a matching 0.1 percent to $12.9 billion. In comparison, personal consumption expenditures increased 0.6 percent to $68.7 billion.
 
This put personal savings well below, which the bureau calculates as disposable income less personal spending. It dropped to $419.8 billion in September, compared with $479.1 billion in August. This means that, expressed as a percentage of disposable personal income, September's personal savings was 3.6 percent, compared with August's 4.1 percent.
 
Meanwhile, September saw an increase in new home sales, the Census Bureau reported last week. Sales of new single-family homes for the month increased 5.7 over August's performance to an annual rate of 313,000. In terms of pricing, September's median sales new home price reached $204,400, and the average sales price was $243,900. In terms of supply, September's estimated pool of new homes for sale was 163,000, which amounted to a 6.2-month supply of homes at September's sales pace.
 
In manufacturing, new orders for manufactured durable goods placed in September decreased by 0.8 percent, or $1.5 billion to $200.3 billion, the Census Bureau reported last week. This decrease, down three of the last four months, followed a 0.1 percent August decrease. Excluding transportation, new orders increased 1.7 percent. Excluding defense, new orders decreased 1.1 percent.
 
Initial claims for unemployment insurance made by the newly unemployed dropped 2,000 claims to 402,000 for the week ending Oct. 22, according to last week's data released by the Employment and Training Administration. The overall number of unemployed Americans covered by unemployment benefits dropped by 96,000 during the week ending Oct. 15, putting the total number of insured unemployed at 3,645,000.
 
Still, Americans grew increasingly wary about how the economy is doing, according to the latest Consumer Confidence Index, which was released last week by The Conference Board. While the Index had improved a bit during September, it saw a drop for October, declining to 39.8 after hitting 46.4 in September (a baseline of 100 was set in 1985). The Present Situation Index, which describes how consumers feel the economy is doing, decreased to 26.3 in October from 33.3 in September. The Expectations Index, which describes how consumers feel the economy will do, dropped to 48.7 in October from 55.1 in September.
 
This week we can expect:

• Tuesday — September construction spending from the Census Bureau; October car and truck sales from the auto manufacturers.
• Thursday — Initial jobless claims figures for the week ending Oct. 29; September factory orders from the Census Bureau.
• Friday — October unemployment, payrolls, earnings and average workweek from the Bureau of Labor Statistics.