From the Desk - Economic Commentary
Scott Hofer, Member Strategies Manager - 9/17/2026
U.S. stocks opened sharply higher this morning, with the Dow up 0.82%, S&P 500 1.05%, and Nasdaq 1.54% at the open. The rebound follows Wednesday’s selloff after the Fed raised rates 25 basis points to 3.75%-4.00%. Falling oil prices and easing Treasury yields are reducing some of the inflation and interest-rate pressure that weighed on stocks. Technology stocks are leading the rebound, with investors buying shares that were hit during Wednesday’s decline.
Regarding economic data releases this morning, initial jobless claims fell to 196,000 for the week ending September 12, down 10,000 from the prior week and well below the consensus estimate of roughly 207,000. The four-week moving average declined to 203,250, reinforcing that layoffs remain relatively low. Continuing claims dropped 39,000 to 1.73 million, suggesting fewer people are remaining on unemployment benefits. The report indicates continued labor-market resilience, although the sharp weekly decline may be partly affected by seasonal volatility around Labor Day.
The Philadelphia Fed Manufacturing Index fell to 37.8 in September from 47.4 in August, indicating slower, but still strong, manufacturing growth in the region. The reading beat expectations of roughly 31, suggesting manufacturing activity was stronger than economists anticipated. New orders and shipments remained elevated, while the employment index declined but stayed positive, indicating continued job growth. Both prices paid and prices received increased, pointing to renewed cost and pricing pressures. Overall, the report signals continued manufacturing expansion with some moderation, alongside firmer inflation pressures; manufacturers remained broadly optimistic about the next six months.
Housing data showed mixed results. Building permits fell 2.7% from July to a 1.394 million annualized rate, below expectations of about 1.40 million, but remained 3.5% above August 2025. Single-family permits declined 1.8% to 878,000, suggesting some cooling in the future construction pipeline.
Housing starts fell 2.6% month over month to 1.275 million, versus expectations around 1.315 million, and were 1.2% below a year earlier. The headline decline masks a stronger 7.6% increase in single-family starts to 918,000, while multifamily starts plunged 22.5% to 344,000. Housing completions were particularly weak, dropping 11.9% from July and 27.1% year-over-year, potentially limiting the pace at which new inventory reaches the market.
Pending home sales increased 0.3% in August from July, according to the National Association of Realtors (NAR), modestly reversing July’s 2.3% decline. However, pending sales were down 4.7% from August 2025, with year-over-year declines in all four major regions. The modest rise in pending sales is encouraging for future existing-home transactions, but the 4.7% year-over-year decline indicates demand remains well below last year's level.
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