Gross Domestic Product
U.S. gross domestic product (GDP) grew 7.4 percent, or $1.3 trillion in Q3, adjusted for inflation. The economy benefited from an increase in consumer spending, a restocking of inventories, exports, new investments in building, equipment and inventories, and new home construction.
The nation has created 11.4 million jobs since May, recouping over half March and April’s losses. But growth is already slowing. Employers added only 661,000 workers in September, less than half the 1.5 million added in August. The nation remains 10.7 million shy of its February level. The recent spike in COVID cases, the expiration of the federal stimulus packages, and uncertainly over the outcome of the presidential election will further slow job gains.
U.S. unemployment peaked at 14.7 percent in April and has steadily improved, decreasing to 7.9 percent in September. But the headline number belies what’s actually happening in the labor market. Since February, 4.4 million Americans have dropped out of the labor force and are no longer counted as unemployed. Factor them back in and the unemployment rate jumps to 10.3 percent.
Existing-home sales grew for the fourth consecutive month in September, hitting a seasonally-adjusted annual rate of 6.54 million, up 9.4 percent from August and 21 percent from September a year ago. Seven out of every ten homes sold were on the market for less than a month.
Retail continues to recover. The U.S. Census Bureau reports September sales were up 1.9 percent from August and 5.4 percent from September of last year. Those numbers reflect a shift in consumer buying patterns. Unable to travel, attend concerts, cheer at sporting events, or dine out, consumers have opted to purchase goods rather than services. Through September of this year, consumers spent 20 percent less on dining than they did over the same period in ’19. The data also reflect a significant increase in online purchasing, up 20 percent so far this year.
Houston’s real gross product (RGP) will shrink 4.8 percent this year (December to December) before rebounding 4.2 percent next year. That’s the latest projections by The Perryman Group, the Waco-based think tank that’s been analyzing and forecasting for U.S., Texas, and Texas metros since the early 1980s.
Houston Employment Update
Metro Houston added 24,400 jobs in September, bringing the total recovered since April to 142,600. Houston re-mains 207,600 jobs short of its pre-pandemic level. The gains put Houston just shy of 3.0 million jobs. The region had topped 3.2 million jobs back in February. In a normal year, the region adds 25,000 to 50,000 in Q4, which would put a considerable dent in the COVID job losses. But this hasn’t been a normal year and job gains through December are likely to be subdued.
At first glance, tech funding in Houston appears remarkably unscathed by the pandemic. Houston-area startups have raised nearly as much venture capital so far this year as they did last year. VC Investments in the region topped $556 million through Q3/20, down only 4 percent from the same period in ’19, according to a Partnership analysis of PitchBook data.
Wells Fargo Economics & Financial Report / Oct 24, 2020
A recent strong report from the National Association of Homebuilders set the tone for another round of strong housing data. The NAHB index rose two points to a record high 85.
Wells Fargo Economics & Financial Report / Jul 13, 2020
The ISM non-manufacturing index jumped 11.7 points to 57.1, reflecting the broadening re-opening of the economy.
Wells Fargo Economics & Financial Report / Aug 26, 2020
After a revised look at GDP this week suggested the second quarter may not have been quite as bad as first estimated, attention shifts to the current quarter.
Wells Fargo Economics & Financial Report / Jan 20, 2023
The housing sector has borne the brunt of the Fed\'s efforts to slow the economy, and this week\'s data showed the industry continues to reel.
Wells Fargo Economics & Financial Report / Jun 18, 2020
The Fed expects to hold interest rates near zero through the end of this year, perhaps well into next year, and maybe even into ’22.
Wells Fargo Economics & Financial Report / Oct 27, 2020
Real GDP jumped a record 33.1% during Q3, beating expectations. A 40.7% surge in consumer spending drove the gain.
Wells Fargo Economics & Financial Report / May 29, 2022
it looks like higher mortgage rates are starting to have some effect on the housing market as April...
Wells Fargo Economics & Financial Report / Sep 19, 2020
A March survey by the Federal Reserve Bank of Dallas found most exploration firms need West Texas Inter-mediate (WTI) at $49 per barrel or higher to profitably drill a well.
Wells Fargo Economics & Financial Report / Aug 23, 2022
July data indicates that we celebrated a decline in gas prices by going shopping, boosting retail sales figures. I’m not sure I get the connection...
Wells Fargo Economics & Financial Report / Jun 13, 2020
Lock downs began to be lifted across most of the country by the end of May and the total amount of daily new coronavirus cases has been trending lower. But the flattening case count has not been consistent across the country.