Economic Snapshot: Pending home sales reach eight-year high

Photo credit to Dan Moyle

We have plenty of great economic news to share ahead of the July 4th weekend, including record numbers in pending home sales, a return to 2014 numbers for the ADP employment report and declines in unemployment.

Pending home sales 

Pending home sales rose 0.9 percent to 112.6 in May, an increase from the slight downward revision of 111.6 in April. Pending home sales are now 10.4 percent above May 2014.

The index has now increased year-over-year for nine consecutive months and is at its highest level since April 2006.

Pending home sales in the Northeast rose 6.3 percent to 93.9 in May and is now 10.6 percent above the previous year. In the Midwest, the index declined 0.6 percent to 111.4 in May but is still 7.8 percent above May 2014.

Pending home sales in the South decreased 0.8 percent to an index of 127.8 in May but are still 10.6 percent above the previous year. The index in the West increased 2.2 percent to 104.5 and is 13.0 percent above a year ago.

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ADP employment report

Private sector employment increased by 237,000 jobs in June, on a seasonally adjusted basis. This is the highest employment report in 2015 so far and marks a return back to employment numbers well above 200,000 that we were seeing in the latter half of 2014.

Small businesses contributed heavily to the increase, adding 120,000 jobs in June. Midsized businesses were not far behind, adding 86,000 jobs. Large businesses added 32,000 jobs.

The service-producing sector had another great month, adding 225,00 jobs in June. Professional and business added 61,000 jobs in June while trade, transportation and utilities added 50,000 jobs. Financial activities added 19,000 jobs.

The goods-producing sector added 12,000 jobs in June. Construction added 19,000 jobs in June and manufacturing added 7,000 jobs, a significant improvement after three consecutive months of declines.

Employment situation

Total nonfarm payroll employment increased by 223,000 in June and the unemployment rate declined 0.2 percentage points to 5.3 percent. Over the past three months, job gains have averaged 221,000 per month. The number of unemployed persons declined by 375,000 to 8.3 million.

In June, the year-over-year change was over 2.9 million jobs.

The labor force participation rate declined 0.3 percentage points to 62.6 percent in June. The employment-population ratio was at 59.3 percent, essentially unchanged in June and has shown little movement thus far this year.

The number of long-term unemployed declined by 381,000 to 2.1 million in June. These individuals accounted for 25.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 955,000.

The number of persons employed part-time for economic reasons was at 6.5 million, little changed in June.

In June, average hourly earnings for all employees on private nonfarm payrolls were unchanged at $24.95. Over the past 12 months, average hourly earnings have risen by 2.0 percent.

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