September 5, 2023
If Memorial Day weekend is the conceptual start of summer even though it is almost a month earlier than the official start of summer, then Labor Day weekend is the similar conceptual start of the fall season. Vacation season is over, and the kids are going back to school. Speaking of vacations, did it seem to you that the entire nation went on vacation this summer? After a few years of sitting at home during the pandemic, everyone seemed ready to get the heck out of Dodge. This phenomenon affected businesses in July and August – some positively and some had a negative influence.
For one, in a normal year the real estate market slows down in July and August but picks up after Labor Day. It has been so long since we have seen a “normal” year, it will be interesting if we see a general pickup in activity. Of course, it would help if mortgage rates would come down a bit which could help fuel some action. Speaking of rates, the Federal Reserve is back in action again. After not meeting in August, they will meet in two weeks. And one of the most important economic indicators they will be analyzing will be this week’s jobs report – which is followed by inflation data next week.
We have seen signs of a cooling job market, though the gains are still healthy. Friday’s release showed that August was no exception with a gain of 187,000 jobs and an unemployment rate of 3.8%. Wage gains were slightly below expectations, but still higher than the Fed’s target year-over-year. We have seen inflation cooling down in general, but it is not near enough to the Fed’s target of 2.0%. It is hard to root for less creation of jobs and smaller raises for American workers, but without these factors in place, it is not likely that the Fed will take their collective feet off the pedal. Still, an increase in short-term rates is not a given during this month’s meeting.
Source: Origination Pro