Last Saturday night, a temporary funding bill was signed by President Joe Biden to keep the government open for 45 more days. This stopgap measure pushes the 2024 fiscal year funding legislation deadline to November 17, avoiding a government shutdown, for now.1
It was also another week of rising interest rates and falling equities. The 10-year Treasury finished at 4.59% last week, while also marking its first time topping 4.60% post-financial crisis earlier in the week.2 The higher interest rates clearly have their effects on the housing market. New home sales fell 8.7% in August, echoing the slowing existing home sales data published earlier.3,4 According to the National Association of Home Builders (NAHB) survey, almost one-third of builders reported cutting home prices to attract buyers.5 However, if interest rates continue to rise, those discounts will only go so far to bridge the affordability gap.
Last Thursday, the Bureau of Economic Analysis (BEA) released its comprehensive update to the national economic accounts.6 The update includes a small up revision to gross domestic product (GDP) over the last five years. It also revised higher the second quarter year-over-year change of the Core Personal Consumption Expenditures (PCE) Price Index from 4.41% to 4.58%. This hints at more inflation for the Federal Reserve to chip away.
Looking ahead, student loan repayments resumed on October 1 and could cost consumers $100 billion over the coming year.7 On the data front, key releases include ISM Manufacturing & Services on Monday and Wednesday, respectively, and the non-farm payroll data on Friday.8
1AP – Government shutdown averted with little time to spare as Biden signs funding before midnight; 10/1/23
2U.S. Department of the Treasury – Government shutdown averted with little time to spare as Biden signs funding before midnight; as of 9/29/23
3U.S. Census Bureau – Monthly New Residential Sales, August 2023; 9/26/23
4National Association of Realtors – Existing Home Sales; September 2023
5National Association of Homebuilders – High Mortgage Rates Continue to Weaken Builder Confidence; 9/18/23
6Bureau of Economic Analysis – Gross Domestic Product (Third Estimate), Corporate Profits (Revised Estimate), Second Quarter 2023 and Comprehensive Update; 9/28/23
7The Wall Street Journal – Student-Loan Restart Threatens to Pull $100 Billion Out of Consumers’ Pockets; 9/16/23
8MarketWatch – U.S. Economic Calendar; as of 10/2/23
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