Weekly Economic Recap 9.21-9.27 2026

Weekly Economic Recap: September 21 – September 27, 2026

Mortgage rates broke above 7% for the first time in over a year, hiring accelerated, and new home sales surprised to the upside even as consumer sentiment stayed near historic lows.

Labor Market

ADP Employment Change: Private-sector hiring picked up in early September, with employers adding an average of 20,000 jobs per week over the four weeks ending September 5 — up from the prior period's 16,250 weekly average.

Jobless Claims: The 4-week average fell to 202,250 for the week ending September 19, down from 204,000 the week before and well below the long-run average of 359,000. Initial claims edged down to 197,000, while continuing claims ticked up slightly to 1,719,000, staying near a three-year low. Claims from federal employees also dropped. The data continue to point to a resilient labor market, consistent with the Fed's view of full employment.

Consumer Sentiment

Michigan Consumer Sentiment (Final): September's reading edged up slightly to 48.1 from a preliminary 47.8, but remained near historically weak levels. Views of current and year-ahead personal finances deteriorated by about 10%, and sentiment weakened across the political spectrum — Republican confidence is down 20% since January, Democratic confidence down 13%. Year-ahead inflation expectations climbed to 4.6%, the highest since June.

Michigan Inflation Expectations (Final): The Consumer Expectations index fell sharply to 46.30, down from 51.50 in August, landing among the weakest readings in the series' history (long-run average: 78.03 since 1952).

Housing

Mortgage Rates: The MBA 30-year fixed rate rose to 7.12% for the week ending September 18 — the highest since early May 2024 — driven by rising Treasury yields following the Fed's hike and hawkish commentary from Fed Chair Kevin Warsh. Rates have climbed over 100 basis points since Iran-related strikes began in late February. By September 24, Freddie Mac's average had eased slightly to 7.03%, still the first time above 7% since January 2025, as the 10-year Treasury yield pushed above 5% for the first time in nearly two decades. The 15-year fixed rate averaged 6.42%, its highest since May 2024.

Mortgage Applications: Applications fell for a third straight week, down 1.5%, with refinancing down 2.6% and purchases down 0.8%. Adjustable-rate mortgages made up nearly 10% of applications as buyers sought ways to manage rising costs.

Building Permits (Final): Permits fell 2.1% month-over-month to 1.403 million units in August — a smaller drop than the initial 2.7% estimate. Multi-family permits declined 1.5% and single-family permits fell 1.6%, with sharp regional divergence (Northeast -15.8%, West +2.3%).

New Home Sales: Sales jumped 6.4% month-over-month to a seasonally adjusted annual rate of 684,000 in August — the highest since the start of the year and well above the 620,000 forecast. The Midwest surged 84.9%, while the Northeast and West both declined. The median sales price edged up to $393,700.

Other Notable Events

Trump-Xi Summit: A summit between President Trump and President Xi took place during the week.

The Bottom Line

The story of the week is a mortgage market pushing past a key psychological threshold: rates above 7% for the first time since January 2025, driven by a Treasury selloff tied to inflation worries, heavy debt issuance, and widening deficits. Yet housing demand hasn't collapsed — new home sales posted their strongest month since February, even as applications and permits softened. Meanwhile, labor market data remains a bright spot, with hiring accelerating and claims low, even as consumer sentiment stays mired near record lows on persistent price concerns.