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, starting with the existing home sale report:
Sales of Existing Homes Surge…
Sales of existing homes surged 6.1% in March to a seasonally adjusted annual rate of 5.19 million, the biggest increase since December 2010 and the fastest growth in 18 months. This was nicely higher than economists’ expectations for a 5.03 million pace. Housing inventory grew 5.3% to two million last month, and it would take 4.6 months to sell all of the homes currently on the market. We are now in the heart of home buying season, so the increase in existing home sales last month was a positive sign. And now, some economists are predicting that this will be the best year for existing home sales since the economic recovery got underway.
…While New Home Sales Stumble
Last month, sales of single family homes slipped 11.4% to an annual rate of 481,000 units. That’s the largest drop since July 2013, and snaps three-straight months of gains. Economists were looking for new home sales to fall to a 513,000 pace in March. February’s sales pace was increased from 539,000 to 543,000 units, which was the highest level in seven years. Obviously, this was a disappointment after the strong sales growth the past few months. The biggest decline came from the Northeast, where new home sales fell 33.3%. So it appears that winter weather may have taken its toll last month.
Layoff Activity Increases for Second Consecutive Week
For the week ending April 18, initial claims for unemployment increased to 295,000, which was well above expectations for 287,000. The four-week moving average also ticked up last week, rising to 284,500. While this is the second week in a row that unemployment claims have climbed higher, claims still remain below 300,000 threshold, which is a good sign for the labor market.
Durable Goods Demand Increases
In March, durable goods orders increased 4%, which was well above economists’ expectations for a 0.6% gain. Core orders, which excludes aircraft and military goods, dipped 0.5%, while shipments of core capital goods fell 0.4% last month. February’s durable goods orders were revised lower to a 2.2% decline. This was the biggest gain in durable goods orders in the past eight months. However, core orders have fallen for seven-straight months, which shows the manufacturing sector is still struggling.
That’s all I have for you this week. I’ll be in touch with the latest Portfolio Grader changes on Monday.
Have a great weekend,
P.S. I will be speaking at the JW Marriott Atlanta in Atlanta, Georgia, on Tuesday, May 5. This seminar starts at 7 P.M. and you may attend at no cost, but please call 800-454-1395 to register. I will review where investors can achieve the highest yields in both bonds and stocks, as well my current market outlook, favorite stock picks and have an extensive question-and-answer session.