It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:
Mixed Unemployment Numbers
For the week ended May 17, jobless claims jumped 28,000 to an annual rate of 326,000. Economists had expected a 320,000 rate so this was a larger than expected jump. Meanwhile, the four-week moving average declined from 323,500 the previous week to 322,500. While initial jobless claims rose more than expected this time around, the measure of layoff activity still remains near seven-year lows.
Check Zillow—Your Home May Be Worth More Than You Thought…
In April, existing home sales gained 1.3% to an annual rate of 4.65 million. This was a stronger turnout than expected, as economists were looking for an annual rate of 4.62 million. Breaking it down, sales of single-family homes ticked up 0.5% while sales of multi-family home sales surged 7.3%. There is currently enough inventory on the market for a 5.9 month supply, higher than the 5.1 supply in March. This represents the strongest pace of existing home sales since December, and the first monthly increase this year so far. There is no doubt that better weather is boosting existing home sales, but the National Association of Realtors seasonally adjusts their data, so the April increase is hopefully the start of robust growth.
…But Buying a New One May Be More Expensive
In April, new home sales jumped 6.4%, rising to a 433,000 annual rate. This was stronger than expected, as economists had forecast a 400,000 annual rate. Meanwhile, March new home sales were revised higher from 384,000 to 407,000. There is currently a 5.3 month supply of new homes on the market at the current sales rate. After a brutal winter for the housing market, spring has finally returned. The median price of a new home is currently at $275,800, just under the all-time record reached in March. Last week’s building permits report suggests that construction activity will continue to heat up through the next few months.
The Makings of a Second-Quarter Rebound?
In April the leading economic indicators (LEI) index rose 0.4%. Economists had expected the measure to rise just 0.3%. Meanwhile, the reading for March was revised to reflect a 1.0% gain, up from 0.8% earlier. In April the positive contributors were building permits, the interest rate spread and consumer expectations for business conditions. This is the third month in a row that the LEI index has risen. The leading economic index is currently rising at a 6% annual rate. Economists are taking it as a good sign for a second-quarter rebound.
Have a great weekend,