Tuesday's Scoop: Building☀️

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Here’s what you need to know today to inform your work, spending, and investments:

1. Wages are catching up to the high cost of living.

2. Earth keeps getting hotter, and it’s going to cost us.

3. Home construction slowed last month, but it might turn around.

Unemployment Rate: 4.1%
^{Relatively normal, low}

Workers' paychecks gained more buying power last month as wages outpaced inflation. The Labor Department reported that average hourly earnings for all employees rose 0.1% from September to October when accounting for inflation. That’s thanks to a 0.4% increase in average hourly earnings and a 0.2% rise in the Consumer Price Index. Over the past year, real hourly earnings increased by 1.4%, meaning paychecks can buy more than they did a year ago. For production and nonsupervisory employees, real hourly earnings rose 1.6% year-over-year, though a shorter average workweek limited real weekly earnings growth to 1.3%. The high cost of living is one of the most common challenges affecting the average American. Wages slowly catching up with the higher cost of living should offer some relief to workers.

Global Energy Emissions: 37.4 billion tonnes of CO₂
^{An all-time high, up 1.1% from 2022. (IEA)}

Earth keeps getting warmer, and it’s going to cost us. According to the EU's Copernicus Climate Change Service, this year is virtually certain to become the hottest on record, with global temperatures expected to exceed 1.5°C above pre-industrial levels. This alarming milestone highlights the accelerating pace of climate change and its severe economic implications. The 2016 Paris Agreement, the most notable climate pact across major nations, outlined plans to cut emissions by 2050 to limit global warming to 1.5°C. The speed of warming is faster than scientists hoped. A new National Bureau of Economic Research report estimates that global economic output could decline by more than 50% by 2100. Extreme heat is already fueling costly disasters like floods, wildfires, and hurricanes, affecting economies worldwide. These findings underscore the urgent need for stronger climate action to mitigate economic risks associated with rising temperatures.

30yr Mortgage Rate: 6.9%
^{That’s down from 7.6% a year ago. (MBA)}
Median Existing Home Price: $404,500
^{That’s up from $393K a year ago. (NAR)}

Hurricanes slowed homebuilding last month, but construction might pick up. The Commerce Department reported that new construction of single-family homes in the US fell 6.9% in October, mainly due to Hurricanes Helene and Milton affecting the South. However, there were signs this slowdown could turn around soon. Building permits increased by 0.5% in October, and homebuilder confidence hit a seven-month high in November, according to the National Association of Home Builders. Companies are hopeful that a more Republican government will decrease regulation and red tape, accelerating construction efforts. Yet, expensive mortgage rates, labor shortages, and rising material costs continue to pose challenges. Many builders are offering price cuts and incentives to attract buyers to newly built homes. So, while builders are more optimistic, affordability remains a key issue stalling home sales and construction.

The Market:⬆️ +0.4%
S&P 500: 5,916.98
1Mo: +1% | 1Yr: +30% | 5Yr: +90%

The market floated higher on Tuesday thanks to encouraging reports from some of America's biggest companies. There are more signs that Americans keep spending despite high prices, and companies are managing expenses well without significant layoffs.