Monthly Market and Economy Roundup - 31 August 2023
Posted on . 3 min read
August 2023 has been a roller coaster for the U.S. economy. This report provides a concise examination of these indicators, giving you a clear picture of the current landscape. In a nutshell, the US economy remains pretty strong, albeit it’s slowing down a little bit. Inflation continues to cool off while job growth remains steady.
As we gear up for the final months of the year, it's clear that both opportunities and hurdles lie ahead. How do all the economic changes impact your investments and your financial future? Login to Xillion to find out!
In August, broad market indices showed declines: S&P 500 (-1.8%), Dow Jones (-2.4%), Russell 2000 (-5.2%), and Nasdaq 100 (-1.6%).
Sectoral Performance: Energy and Materials saw gains at 1.3% and 3.6%, respectively. All other sectors registered declines, with Utilities experiencing the largest drop at -6.7%.
Crude Oil and Natural Gas prices rose by 3.0% and 4.6%, respectively. Silver also saw a marginal increase of 0.6%. Gold remained unchanged, while Copper prices declined by 3.5%
In Q2 2023, the real GDP grew at a 2.1% annual rate, slightly higher than the 2.0% increase seen in Q1. This growth was driven by consumer spending, private investments in non-residential fixed assets like machinery, equipment etc., and increased government spending by both state and federal governments. The growth, however, was tempered by lower exports, residential fixed investments, and private inventory investments.
Inflation: The overall CPI rose by 3.2% year-on-year in July, a minor increase from the 3.0% observed in the previous 12 months. Excluding food and energy, the CPI increased by 4.7% over the past year. Energy costs went down by 12.5% in the year ending July, while food prices increased by 4.9% over the same period.
The 30-year mortgage rate reached a peak of 7.23% in the week ending August 23rd, the highest in over two decades. However, it slightly decreased to 7.18% by the week ending August 30th.
US job openings dropped to 8.8 million in July, the lowest since March 2021, yet remained high compared to pre-pandemic levels. The quit rate for US workers decreased to 2.3%, marking the lowest since January 2021.
Imports saw an 8.2% decline year-on-year, while exports fell by 3.4% in Q2 2023
US unemployment rate rose to 3.8% in August, the highest since February 2022. Notably, the 3.4% in April was the lowest since 1969.
The average price of homes sold in Q2 2023 was $495,100, down from $552,600 in Q4 2022, while the median price dropped to $416,100 from a Q4 2022 high of $479,500.
