The U.S. 2020 Presidential election is a week away. Read our recent white paper, Election Anxiety?, for some insights.
- Existing-home sales rose 9.4% in September from the prior month to a seasonally adjusted annual rate of 6.54M, the highest rate since May 2006
- U.S Deficit reaches $3.1 Trillion, equivalent to 16.1% of economic output and 102% of gross domestic product
- Leading Economic Index increased 0.7% in September
Top Three Market Headlines
Housing Sales Continue to Climb: U.S. housing market activity rose to a 14-year high in September, marking the fourth straight month of growth. According to the National Association of Realtors, sales of existing homes, which make up a majority of housing transactions, rose 9.4% from the prior month to a seasonally-adjusted annual rate (SAAR) of 6.54 million units in September. Much of the housing market’s recent success can be attributed to record low interest rates, an uptick in demand from millennials entering the market, and homebuyers searching for more space as time spent at home increases due to the Coronavirus pandemic.
US Budget Gap Reaches $3.1 Trillion: The U.S. budget deficit tripled to a record $3.1 Trillion through the fiscal year ending September 30, as the U.S. government grappled with the coronavirus pandemic. The main contributor to the growing deficit was the Cares Act, a $2.2 Trillion coronavirus relief effort that Congress approved in March. Federal debt now totals 102% of gross domestic product, the first time it has grown larger than the size of the economy in 70 years. The unprecedented debt levels extend overseas; the International Monetary Fund announced that global public debt will likely approach a record 100% of output, but continued to encourage policymakers to maintain spending to aid a strong recovery.
Leading Economic Index Indicates Slowing U.S. Growth: The Leading Economic Index (LEI) for the U.S. increased in September by 0.7%, a slower pace compared to increases of 1.4% in August and 2% in July. The LEI, published monthly by The Conference Board, is intended to signal shifts in the business cycle based on a basket of 10 different economic and financial indicators. According to the latest report, declining unemployment claims and rising housing permits drove the increase in September. The report also notes that the decelerating pace of improvement could indicate that the economy is losing momentum as 2020 comes to an end.