Labor Market. The employment situation in Idaho continues to be positive as the state economy added 28,200 jobs in July compared to last year.
While the unemployment rate ticked up slightly from 4.0 percent to 4.1 percent, this is likely a reflection of more people looking for work and not an increase in the state’s long-term unemployment. Compared to July of last year, unemployment has decreased by eight-tenths of a percentage point, and total employment has increased by 2.7 percent. Nationally, the labor market improved as the unemployment rate decreased 0.2 point to 5.1 percent in August. Over the last year, total employment has increased 2.1 percent nationally.
The latest numbers of weekly jobless claims in the United States rose slightly to 277,000 from 273,000 claims the week before. This is still a historically-low number; weekly initial jobless claims can be highly volatile, so the unexpected increase should not cause major concern. Since a weekly jobless claims rate below 400,000 is considered healthy by most economists, the overall picture is positive although the number of applicants for unemployment insurance increased slightly. The national economy created 215,000 jobs, showing signs of strong growth in the labor market.
Housing Market. Idaho’s home prices continue rising at a modest rate, increasing 0.8 percent from June and 4.8 percent compared to July 2014. This left home prices 12.5 percent below their pre-recession high, down from 13.5 percent in June. Nationally, home prices followed a similar trajectory, increasing 1.7 percent from June and 6.9 percent compared to July 2014. National home prices are still 6.6 percent below their pre-recession high.
In further good news, U.S. new-home construction rose to its highest level in nearly eight years in July. According to a report from the Commerce Department, residential starts rose 0.2 percent to an annualized rate of 1.21 million, the highest annualized rate since October 2007. This rise in activity could yield significant economic benefits. “When we’re adding homes like this, it has a significant multiplier effect on the economy, in housing-related retail sales, jobs, consumption,” said Eric Green, head of U.S. economic research at TD Securities in New York. “We are exactly where we want to be in housing.” As home prices rise and new construction continues, Americans can expect to reap significant economic benefits.
U.S. Consumer Price Index. The national Consumer Price Index (CPI) released by the Bureau of Labor Statistics showed essentially no change from June to July on a non-seasonally adjusted basis. The index has grown 0.2 percent over the past twelve months.
Gasoline prices increased 0.9 percent while electricity and natural gas both declined in price in July. All major energy components have declined in price over the past 12 months. Food prices increased for the second month in a row as the avian flu boosted poultry and egg prices. The food at home index rose by 0.3 percent, with all six major grocery store food group indexes rising modestly.
Economists often use the “core CPI” index—all items less food and energy—to measure changes in prices nationally. The core CPI shows actual growth or decline more accurately because it eliminates the volatility of the energy and food indexes. In July, the core CPI rose 0.1 percent. The main contributors to this increase were shelter, rent, lodging, apparel, and medical care. Other indexes saw declining prices: airline fare, used cars, new vehicles, and household furnishings.
U.S. Consumer Confidence Index. The U.S. Consumer Confidence Index (CCI) increased in August after declining in July. The Index rose 10.5 points to 101.5. Both sub-indexes of the CCI rose in July, contributing to the sharp increase. Consumer confidence has fluctuated in recent months, increasing and decreasing almost every other month.
The Present Situation Index, the sub-index of the CAI that measures how consumers feel about current economic conditions, increased 11.1 points to 115.1 in August. Consumers who say business conditions are “good” decreased marginally from 23.4 percent in July to 23.2 percent in August. Consumers were also slightly more positive about job availability. Those stating that jobs are “plentiful” increased from 19.9 percent to 21.9 percent.
The Expectations Index experienced a sharp increase from July to August, rising 10.2 points to 92.5. Expectations for the labor market in the next six months increased slightly in August. Consumers expecting a bump in their household income declined moderately, dropping from 17.0 to 16.2 percent.