U.S. consumer spending slowed in August as unemployment benefits expired, though retail sales rose 0.6% year-over-year. The Fed held rates near zero through 2023, and 30 million people still collected unemployment. Single-family home construction jumped 4.1%, but overall housing starts fell due to weak multi-family building.
Markets in a Minute. The economy. Consumer spending slowed in August as extended unemployment benefits ran out for millions of Americans. Despite being lower than expected, retail sales still increased 0.6%. The Fed left policy rates unchanged at this week's meeting and signaled near-zero rates will last through 2023 to aid the economy on its rebound from the coronavirus shutdowns. Jobless claims fell slightly less than expected last week, suggesting the labor market recovery has slowed. Nearly 30 million people remain on unemployment benefits. Housing news. Single-family home construction increased 4.1% for the month. Overall, housing starts fell more than expected in August, as multi-family home construction slumped. Builder confidence remains at an all-time high as housing leads the economic recovery. This month's level beat last month's record high despite labor shortages and rising lumber prices. Purchase mortgage applications last week were 6% higher than a year ago, though down 1% from the previous week. Total applications declined 2.5% for the week. Thank you for watching.
