US existing home sales reached six million in August, the highest level in 14 years, up 2.4 per cent from July and up 10.5 per cent from the same month a year ago as the housing market continued to outperform the overall economy. However, record high home prices could squeeze first-time buyers out of the market.

August was the third consecutive month of gains, according to the report by the National Association of Realtors.

The median existing home price was up 11.4 per cent from 2019. The report confirmed that home sales have recovered after slumping when the economy almost ground to a halt as businesses were shuttered in mid-March amid coronavirus control measures.

Meanwhile, business activity in the eurozone virtually came to a halt in September, with the services sector being the main drag owing to the resurgence in coronavirus cases across the currency bloc. Flash survey data from IHS Markit showed on Wednesday that the composite output index declined to 50.1 in September from 51.9 in August. Economists had forecast the reading to inch down to 51.7.

The bright spot is the manufacturing sector which remains unperturbed by the situation as a pick-up in foreign demand is helping to bolster new orders and output. At 53.7, the manufacturing Purchasing Managers’ Index (PMI) hit a 25-month high.

Economists had forecast the gauge to rise to 51.9 from 51.7 in August. On the other hand, the services PMI dropped to a four-month low of 47.6, while economists forecast it would remain unchanged at 50.5.

Finally, Australia’s private sector recovered at the end of the third quarter after the coronavirus measures were loosened in parts of the country, initial survey data from IHS Markit showed on Wednesday. The composite output index rose to 50.5 in September from 49.4 in August. A reading above 50 indicates expansion. The recovery in overall activity was underpinned by further manufacturing production growth as services business activity was unchanged from August. The manufacturing PMI rose to a 29-month high of 55.5 in September from 53.6 in August. At the same time, the services PMI came in at neutral 50.0 compared to 49.0 in August. The rise in private sector activity was accompanied by renewed sales growth.

This report was compiled by Bank of Valletta for general information purposes only.

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