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:
New Home Sales
The Commerce Department announced that new home sales in February surged 6.1%, compared with January’s annual rate of 592,000. February new home sales were significantly higher than economists’ consensus estimate of 571,000. In the past 12 months, new home sales have jumped 12.8%. New home sales are also at a 7-year high, which is good news for homebuilders and all their suppliers.
Existing Home Sales
The National Association of Realtors reported that existing home sales in February declined 3.7% to an annual pace of 5.48 million. However, this was a bit higher than economists’ expectation of 5.45 million. In past 12 months, the inventory of homes for sale has fallen by 6.7% and median prices have risen 7.7%. There is no doubt that the ultra-tight inventory of existing homes for sales are helping to boost home prices, but they’re also restricting existing home sales a bit.
For the week ending on March 18, initial jobless claims rose 15,000 to a 258,000 annual rate. Economists were forecasting a 237,000 annual rate, so this jump was somewhat unexpected. However, it’s far too soon to tell whether this is a one-time event, or the start of a larger trend. The four-week moving average rose just 1,000 to 240,000. The fact is that jobless claims have fallen below 30,000 for 80 straight weeks, so I’m not overly concerned about last week’s increase.
Durable Goods Orders
The Commerce Department announced that durable goods orders surged 1.7% in February after rising a revised 2.3% in January. As in January, commercial aircraft orders led durable goods in February, surging almost 48%. This continued strength in commercial aircraft orders helped to offset a 1% decline in automotive orders. Excluding transportation, durable goods orders rose 0.4% in February, continuing a six month winning streak. Defensive spending was also a drag on durable goods orders but is expected to perk up in the coming months due to higher defense spending. Overall, the manufacturing rebound continues; this will undoubtedly help to boost GDP growth.
That’s all I have for you this week; I’ll be in touch again next week with the latest ratings updates out of Portfolio Grader.
Have a great weekend,