US economy roundup: Labor, housing and the stock market

By Laura Koran , for CNN Written by

Summer’s economic data won’t wilt from this weekend.

With forward momentum rising and jitters at the Federal Reserve receding, markets look set to ride strong fundamental signs through to the upcoming fall and winter.

Some key takeaways:

The job market is humming

Data released on Friday revealed a couple of promising signs on hiring.

U.S. employers added 213,000 jobs in August, beating forecasts and notching up an average of 224,000 a month in the first half of the year.

Meanwhile, average hourly earnings rose 0.3% in August from the month before, with the annual gain reaching 2.5%, the fastest growth since 2009.

“Those are very significant gains, and they do suggest that after a disappointing start to the year, we have been able to get to the positive territory in the labor market, without strong wage growth, but still very strong overall,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

Economists expect the numbers to prompt wage growth.

“This is the main piece of evidence that things are turning,” said Sung Won Sohn, economics professor at California State University Channel Islands.

Older US homeowners also benefit from lower home prices

The housing market also extended its renewed run last month with a strong report on existing-home sales.

The National Association of Realtors reported last week that purchases of previously-owned homes surged in August, driven by several months of strong supply data and low mortgage rates.

Sohn said a bright sign is that the market is now attractive for longtime homeowners who may have refinanced their mortgages to lower their mortgage payments in the past, but would not have been ready to buy property until they were close to retirement.

“Those people are paying less for housing now. There is less of a gap between affordability and home price, in terms of wages and incomes,” he said.

Still, home prices have yet to pull back, with the NAR reporting that prices rose again in August, matching the strongest pace in seven years.

Unemployment rate set to drop more than expected

The latest “jobs report” by the Labor Department also confirmed that some jobs growth was broad-based. The unemployment rate came in at 4.0%, its lowest level since 2001.

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