It was a shortened trading week, so we only had a few noteworthy pieces of economic news. So before you head out for the weekend, let’s take a look at these market-moving headlines.
#1—Jobless Claims Start to Stabilize
Last week, initial claims for unemployment was barely changed at 326,000, just 1,000 more from the prior week’s revised figure of 325,000. Economists were expecting 327,000 in initial claims. In addition, the four-week moving average dipped by 3,750 to 331,500. That’s the lowest level in six weeks.
We’re starting to see jobless claims stabilize a bit after the volatility in December due to the seasonal adjustment that the Labor Department does this time of year, and as always we pay more attention to the four-week moving average. In addition, this was the second week in a row that claims were revised down instead of up, a relatively rare occurrence. So it seems that jobless claims have leveled off a bit as the labor market shows steady improvement.
#2—Strongest Year For Housing Since ’06
In December, existing home sales edged up 1% to a seasonally adjusted annual rate of 4.87 million. Analysts were looking for 4.9 million home sales, so this was a modest disappointment, and November’s rate was revised down to 4.82 million. For all of 2013, sales were 5.09 million, up 9% from 2012, the strongest showing since 2006.
This is the second month in a row that sales posted a year-on-year drop, but housing inventories remain tight at a 5.6 month supply, down from a 5.1 month supply in November. So it’s clear that the housing market remains volatile, but we’re still on a solid recovery path as consumer confidence improves.
#3—The Future Is Still a Mixed Bag
In December, the index of leading economic indicators ticked up 0.1%. Economists had expected the measure to climb 0.2%. Five of the 10 indicators in the leading index contributed to the increase, including stock price gains, the spread between short- and long-term interest rates and rising manufacturer orders. Meanwhile, November’s reading was revised up from 0.8% to 1.0%.
This was a mixed bag, since the LEI index remains on a positive track, but the weaker components last month included building permits and consumer confidence numbers. So we’ll keep a close watch on these numbers, and we’ll also have a better picture view of the economy with next week’s advance fourth-quarter Gross Domestic Product announcement.
Have a great weekend,