MetroIntelligence Economic Update by P. DUFFY
Construction spending slips 0.3 percent in October but up 9.2 percent year-on-year
Construction spending during October 2022 was estimated at a seasonally adjusted annual rate of $1,794.9 billion, 0.3 percent below the revised September estimate of $1,800.1 billion. The October figure is 9.2 percent above the October 2021 estimate of $1,644.3 billion. During the first ten months of this year, construction spending amounted to $1,507.8 billion, 10.8 percent above the $1,360.8 billion for the same period in 2021.
Consumers continued to spend at higher levels than inflation and incomes in October
Both personal income and disposable personal income increased 0.7 percent in October, while personal consumption expenditures (PCE) increased 0.8 percent, 0.5 points higher than the monthly rise in PCE inflation. The personal savings rate fell to 2.3 percent, the lowest since July 2005.
Inflation tracker PCE price up 0.3 percent in October and 6.0 percent year-on-year
The PCE price index rose 0.3 percent in October, the same as the two previous months, and was up 6.0 percent year-on-year, down from 6.3 percent in September. The ‘core’ index minus food and energy costs rose 0.2 percent in October, down from 0.5 percent the two previous months, and was up 5.0 percent year-on-year, down from 5.2 percent in September.
Purchase loan apps rise 4 percent from previous week, but down 41 percent year-on-year
The Market Composite Index for mortgage applications decreased 0.8 percent on a seasonally adjusted basis from one week earlier, with purchase loans rising 4 percent (but down 41 percent year-on-year) and refinance activity falling 13 percent (and down 86 percent year-on-year). The adjustable-rate mortgage (ARM) share of activity increased to 9.0 percent of total applications. The average contract interest rate for 30-year conforming fixed-rate mortgages decreased to 6.49 percent from 6.67 percent.