California Home Sales and Median Prices in October

The California Association of Realtors recently released their report on California existing home sales and median prices in October. The statewide median price fell by 1.3% compared with September to $475,990, but was up over the year by 5.7%.

The number of single-family homes in California that closed escrow in October increased by 1.3% over the year to 403,510 units (seasonally adjusted annualized rate). Compared with September, sales were down by 5.1%. The year-to-year gain was the lowest since January 2015 and was well below the six-month average increase of 9.7% recorded between April and September of this year.

California home sales are on track to close the year with a mid-single digit increase over last year. Employment growth and low interest rates should keep demand growing at a modest pace through the remaining months of 2015, but housing affordability is a big issue in many parts of California and is negatively impacting sales in some regions. The Bay Area in particular continues to see sharp increases in median price due to a shortage of homes for sale. As a result, homeownership is increasingly out of reach for more and more people.

Below is a year-over-year summary of sales and price activity in Southern California by county. Although the statewide sales figures are seasonally adjusted, regional and county figures are not.

§  Los Angeles County:  unit sales declined by 1.4% over the year in October, while the median price rose by 6.7% to $509,570.

§  Orange County: sales edged higher by 1.9% and the median price increased by 1.7% to $704,370

§  Riverside County:  sales of existing homes rose by 4.5% and the median price moved higher by 4.0% to $334,660.

§  San Bernardino County:  sales dipped by 0.7% in October but the median price was up by 11.2% to $231,330.

§  San Diego County:  unit sales edged down by 0.5% as the median price rose by   9.3% to $539,000.

§  Ventura County:  sales increased by 11.6% over the year while the median price rose by 3.6% to $604,610.

Source: http://www.car.org/newsstand/newsreleases/2015releases/october2015sales?view=Standard

October State and Local Employment Report

The Employment Development Department (EDD) released the state and local employment reports for the month of October. Total California nonfarm employment increased by 41,200 jobs over the month in seasonally adjusted (SA) terms. Moreover, the 8,200 job gain initially reported for September was revised up to 21,100 jobs.

The year-over-year change showed an increase of 463,000 jobs (SA). This equated to a growth rate of 2.9%, once again exceeding the October national increase of 2.0%. California’s private sector added 427,200 jobs (an increase of 3.2% over the year), while employment in the public sector rose by 1.5% (35,800).

There was little change in employment trends across industries. Nine of the 11 super-sectors added jobs over the year to October: construction; trade, transportation and utilities; information; financial activities; professional and business services; educational and health services; leisure and hospitality; other services and government for a combined gain of 468,300 jobs. Professional and business services once again posted the largest gain on a numerical basis, adding 130,000 jobs (up 5.3%), while construction continues to claim the largest gain in percentage terms, increasing by 7.3% and adding 49,800 jobs.

Two sectors that recorded a decline over the year in October. Mining and logging was down by 7.4%, a loss of 2,300 jobs; manufacturing employment edged down by 0.2% or 3,000 jobs.

California’s unemployment rate declined slightly from 5.9% in September to 5.8% in October and was down from the year ago rate of 7.2%. California’s unemployment rate is now the lowest it has been since December 2007 when it was also 5.8%. The civilian labor force edged down over the month by 0.1%, but was up over the year by 0.6%. Of the 11.4 million Californians not in the labor force, 808,000 (7.1%) say they would like a job, while 0.7% of that group reported being discouraged over job prospects.

County highlights:

(Note: With the exception of the Los Angeles unemployment rate, county level numbers are not seasonally adjusted, which means there can be large month-to-month fluctuations in job counts. A truer picture of how local labor markets are faring is revealed by focusing on the year-over-year numbers. Annual trends “correct” for the seasonal factors that influence certain industry sectors over the course of the year.)

·      In Los Angeles County, the seasonally adjusted unemployment rate was 6.1%, down from 6.5% in September and below the year ago rate of 8.0%. Total nonfarm employment (not seasonally adjusted) increased by 37,800 jobs over the month and was up over the year by 85,300 jobs, an increase of 2.0%.

Educational and health services posted the largest year-over-year gain in employment in October with a net increase of 22,600 jobs. The health care industry added 23,500 jobs, but a drop of 900 jobs in educational services reduced the overall industry gain.

Also recording significant job gains were leisure and hospitality, which picked up 18,700 jobs, most of which were in accommodation and food services, and professional and business services employment with the addition 15,300 jobs.

Four major industry sectors reported year-over-year declines in October: manufacturing employment contracted by 5,000 jobs; information lost 3,400 jobs; financial activities was down by 200 jobs, and in the mining and logging sector, job counts fell by 200.

·         In October, the unemployment rate in Orange County was 4.3%, up from 4.0% in September but below the year-ago figure of 5.2%. Nonfarm payroll jobs increased by 13,900 over the month and were up by 41,000 over the year (an increase of 2.7%).

·      In the Riverside-San Bernardino area, the unemployment rate in October was 6.4% compared with 6.1% in September but below the year ago estimate of 7.7%. The Inland Empire gained 21,400 nonfarm payroll jobs over the month and 43,200 over the year. This represented an increase of 3.3%.

·       In Ventura County, the unemployment rate was 5.4%, down from the year ago estimate of 6.4%. Total nonfarm employment was up by 3,900 over the month and was up over the year by 6,700 jobs (2.3%).

Summary: California’s labor market was back on track in October after a somewhat weaker showing in September and the unemployment rate continued its downward trend. In Southern California, every region saw job gains along with year-over-year decreases in their unemployment rates. Los Angeles County’s unemployment rate fell to 6.1%, the lowest since early 2008.

Sources:  http://www.labormarketinfo.edd.ca.gov/

U.S. Light Vehicle Sales Strong and Steady

U.S. Light Vehicle Sales Strong and Steady

In October, U.S. light vehicle sales were up by 10.1% over the year to 18.1 million units (seasonally adjusted annualized rate). This marked only the second time on record auto sales have recorded two consecutive months with an SAAR north of 18 million units. On a per unit volume basis, 1.45 million light vehicles were sold last month, an impressive increase of 13.6% over the month, making it the highest October volume on record.

Demand is still solidly on the side of light trucks, especially crossover utility vehicles. Sales increased by 18.6% over the year in October to 10.4 million units and accounted for 57.2% of the light vehicle sales mix.

• Sales of domestic trucks increased by 12.6% over the year to 8.3 million units
• Foreign light truck sales, which currently account for slightly less than 20% of the light truck market, surged by 51.1% to 2.0 million units
• Compared with September, however, sales of pick-ups, SUVs and crossovers edged down by 0.5%.

Total passenger car sales, including foreign and domestic models, edged up by 0.5% over the year to 7.8 million units.

• Sales of domestic autos were up by 1.3% over the year to 5.8 million units
• Sales of foreign passenger cars declined by 1.7% to 1.9 million units
• Compared with September, total passenger car sales moved higher by a modest 1.5%

Sales of medium-heavy trucks rose by 13.4% over the year in October to 483,000 vehicles. Since these heavier trucks are commonly used by business to haul freight and make deliveries, an increase in demand for these vehicles is an indication of stronger business activity.

Even though the pace of sales in September and October was exceptionally robust, there is little indication sales will slow dramatically during the final two months of 2015. Most automakers posted double-digit sales gains last month led by Subaru (up 20.0%) and GM (up 15.9%).  Even VW, in the midst of an emission scandal and a stop-sale order on specific models posted a 5.6% gain for the month.  At the risk of being repetitive, U.S. auto manufacturers have been riding high on a wave of credit availability, lower gasoline prices, increasing levels of leasing activity and positive (mostly) economic news. 

Source:  www.bea.gov

U.S. Labor Market Bounces Back in October

U.S Labor Market Bounces Back in October

The U.S. Labor Market Report covering the national employment situation in October showed a gain of 271,000 nonfarm jobs. The unemployment rate edged down to 5.0%. The average workweek was unchanged last month at 34.5 hours, but the average hourly wage increased by nine cents to $25.20. Over the year, average hourly earnings were up by 2.5%, the fastest pace of wage growth since mid-2009.

The employer payroll survey reported that total nonfarm employment in the United States increased by 271,000 jobs in October. The private sector contributed 268,000 jobs to the October increase, while the public sector added 3,000 jobs, all of which were in state government. Employment growth was broad based with nearly every major industry sector adding jobs last month. The exceptions were mining and logging (mainly energy-related activities), and information. The manufacturing sector was flat with a gain of 3,000 jobs in nondurable goods, which was offset by an equal loss in durable goods.

There was also a positive net revision to the August and September figures of 12,000 jobs. Over the past three months, job gains have averaged 187,000 per month. The 2015 year-to-date average monthly gain was 206,000 jobs, somewhat below the 236,000 figure for the same period in 2014.

On a year-to-year basis, U.S. employment expanded by 2.814 million jobs, an increase of 2.0%. In year-to-year terms (YTY), mining and logging was the only industry to record a decline. The largest YTY gain occurred in health care and social assistance with 606,000 jobs added over the year, an increase of 3.3%. Leisure and hospitality added 433,000 jobs (up 2.9%) and retail trade employment rose by 433,000 jobs (up 2.0%). Professional and technical services also posted a strong gain (313,400 jobs, 3.7%), as did administrative and waste services (295,200 jobs, 3.4%).

Turning to the household survey, in October the unemployment rate was 5.0%, the lowest in seven years. The year ago rate was 5.7%. The labor force participation rate held steady at 62.4%, a 38-year low. The more comprehensive U-6 unemployment rate was 9.8%, well below the 20-year average for this indicator of 10.7%. The U-6 unemployment rate counts part-time workers who would prefer full-time work and individuals who have given up looking for a job.

Other labor market indicators also continue to show improvement. The share of workers who have been jobless for 27 weeks or more currently stands at 26.8% of all unemployed persons, down from the year ago rate of 31.9%. Over the past 12 months the number of long-term unemployed persons has fallen by 762,000. The median duration of unemployment is also on the decline, falling from 13.5 weeks in October 2014 to 11.2 weeks last month.

Summary: The addition of 271,000 jobs last month far exceeded expectations and are an indication that underlying economic growth remains solid despite some recent soft readings in the manufacturing sector. Although the LAEDC expects job gains will moderate over the next year as the expansion matures, the unemployment rate will continue to trend down.

Source:  http://www.bls.gov/news.release/pdf/empsit.pdf