Consumer sentiment rebounded in May. Income gains, an improved jobs outlook, and low home loan rates inspired more people to put on a happy face. Those feelings beamed across all income levels but especially among lower-income and younger households, according to the Consumer Sentiment Index.
Retailers felt the glow as April Retail Sales jumped 1.3 percent from March, the biggest monthly gain since March 2015. The Retail Sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business throughout the nation. It is the most timely indicator of broad consumer spending patterns.
Job Growth Eases in April Job growth at the end of 2015 and early 2016 certainly helped put more spending money into more hands across the country. But will it continue?
The Bureau of Labor Statistics reported that U.S. employers hired 160,000 new workers in April, below the 207,000 expected. This was the lowest number since September 2015. And job growth per month slowed to an average of 200,000 for the last three months reported, down from a five-year high of 282,000 new jobs per month in the fourth quarter of 2015. The good news is, the Unemployment Rate is still at 5 percent, which is close to full employment.
Housing News Gets Jumpy That spending money will also come in handy for homebuyers as home prices continue to jump across much of the country. Home prices, including distressed sales, rose 6.7 percent from March 2015 to March 2016, with a 2.1 percent gain from February to March 2016, according to data analytics firm CoreLogic.
April Housing Starts also jumped 6.6 percent from March to an annual rate of 1.17 million. Housing Starts measure when excavation begins on a home. Despite the jump, however, April Housing Starts were 1.7 percent below April 2015. Building Permits, a sign of future construction, rose 3.6 percent to an annual rate of 1.11 million, below the 1.13 million expected.
Although homebuyers in many regions of the country struggle with low housing inventory, Existing Home Sales for April increased for the second month in a row. The National Association of REALTORS® reported April sales increased 1.7 percent from March, and year-over-year sales are up 6 percent.
A Final Reason to Smile Despite the occasional ups and downs following economic news headlines, home loan rates continue to hover near historic lows, which is great news for homebuyers and those thinking about a refinance.
This article was taken from my June 2016 issue of YOU Magazine. Click here to view the full newsletter.