Initial claims rose by 4,000 in the September 19 week to a level of 870,000, below the 880,000 level expected and within the same narrow range for the last four weeks.
The four-week moving average for initial claims fell by 32,250 to 878,250 in the current week, an eighth straight decline. The last week of initial claims levels using the old seasonal adjustment factors rolled out of the four-week window with this week’s data, so movement in the average should be smaller and not necessarily downward in the coming weeks.
Unadjusted claims rose by 28,527 in the current week after a decrease of 69,980 in the previous week. Seasonal adjustment factors expected a smaller increase in the current week, leading to the small increase in the seasonally adjusted figure.
The state data showed large gains in New York, Georgia and California.
The Labor Department reported that 630,080 workers filed under Federal Pandemic Unemployment Assistance on an unadjusted basis in the current week, down from 675,154 in the previous week.
The level of continuing claims fell by 167,000 to 12.580 million in the September 12 employment survey week, down sharply from the 14.492 million receiving benefits in the August 15 employment survey week, a positive for September payrolls.
In other data released Thursday, the pace of new single-family home sales rose by 4.8% to a 1.011 million annual rate in August, well ahead of the 875,000 pace expected and the highest since September 2006 during the housing boom. Existing home sales data released on Tuesday showed the strongest rate for that series since December 2006.
Mortgage rates remain near record lows which should continue to support the housing market going forward. At some point, though, demand will be satisfied, and sales should move back to a more sustainable pace.
New home sales were up in two of the four regions in August: the Northeast and the South, the largest of the four regions. Sales declined in the Midwest and West.
Home supply fell by 3.1% month/month and 13.2% year/year, cutting the months’ supply to 3.3 months at the current sales rate. This is down from 3.6 months in July and sharply lower than the 5.5 months in August 2019.
The sharply reduced supply may be restraining sales even as they are the strongest in over a decade. However, the reduced inventory doesn’t seem to be having an impact on prices, in contrast to existing home sales. The median sales price of a new home was $312,800, down 4.6% from July and 4.3% from a year ago.
New Home Sales (Seasonally Adjusted Annual Rate)
Source: U.S. Department of Commerce