October 3, 2023 | Driving It Home with ABoR's Housing Economist

Job growth slowed in the Austin-Round Rock-Georgetown MSA in August. Total nonfarm employment grew 2.4% YoY in the Austin MSA relative to 2.8% in Texas and 2% in the United States. Sluggish growth in both the Information (0.2% YoY) and Financial Activities (0.1% YoY) sectors weighed on job growth in the Austin MSA. Both sectors continue to face turbulence from broader macroeconomic headwinds, including higher interest rates and greater financial uncertainty related to rate hikes. Meanwhile, the unemployment rate in the Austin MSA (3.6%) measured below that of both Texas (4.1%) and the United States (3.8%).  The personal-consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation, rose 0.4% MoM in August, which was in line with consensus expectations. Excluding the volatile categories of food and energy, the MoM increase was 0.1%, the smallest monthly increase since November 2000. Markets interpreted the favorable news well: investors reduced the probability of either a November or December rate hike. The Fed’s data dependency means that the employment numbers released this week and the CPI numbers released in a few weeks will weigh heavily on the Fed’s decision regarding its November rate decision. Closed sales and leases increased considerably on a week-over-week basis (approximately 50% and 40%, respectively). This is partially due to last week falling at the end of the month (generally, closed sales and leases tick up the last week of any given month). Mortgage rates remain elevated, averaging 7.31% last week, which will continue to pose a drag on the housing market. However, the favorable PCE reading is a solid step in the right direction in the Fed’s fight to combat inflation. Links mentioned in this episode: Buy vs. Rent Index https://www.abor.com/buyrentindex Market Shift Conversations | October 10 https://www.abor.com/event-type/marke... Download the Audio Transcript + Episode Summary: https://www.abor.com/content/uploads/... Truth About Austin's Missing Housing Report: https://www.abor.com/thetruth Buy vs. Rent Index: https://www.abor.com/buyrentindex One-Page Customizable Buy Vs. Rent Index Summary: https://www.abor.com/customizables Connect with us on socials: https://www.abor.com/socials Connect with Dr. Clare Losey on LinkedIn:   / clare-losey