The service sector of the US economy continues to be a bright spot in the US economy. The Institute for Supply Management (ISM) reports that economic activity in the non-manufacturing sector grew for the 117th consecutive month, said the nation's purchasing and supply executives. The ISM Service Index registered 54.7 in October, up from the reading of 52.6 in September. Within the data, it showed that the employment index rose 3.3 points to 53.7. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.
CoreLogic reports that home prices, including distressed sales, rose 3.5% year over year in September 2019 compared to September 2018, up 0.4% monthly from August to September. Looking ahead, CoreLoogic is forecasting a 5.6% increase from September 2019 to September 2020. “Mortgage rates were a full percentage point lower this September compared to a year ago, boosting affordability for first-time buyers and supporting a rise in homeownership. In addition to lower interest rates, personal income grew faster than home prices during the past year. This provided an additional lift for first-time buyer affordability and helped to boost the homeownership rate to the highest level in more than five years.”
The continued rally in US stocks has sent the major major indexes to record highs this week. Positive trade headlines, a largely better-than-expected earnings season along with an upbeat Jobs Report for October are a few of the reasons behind the move higher for equities. Year-to-date, the Dow is up 18%, S&P up 23% while the NASDAQ has gained 27%. If a trade deal can get done between the US and China, stocks could push to new high levels.