Home Sales Disappoint


Existing home sales fell 4.3 percent in November compared to October, coming in well below consensus estimates. The drop in sales was also 1.2% below last November’s rate, marking the first year-over-year drop in 29 months, according to the National Association of Realtors, which collects that data. Although the volume of sales declined, prices continued to post strong gains; median home prices are up 9.4% from the same time last year.  Housing inventories remain tight, Read More »

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Durable Goods Orders Rebound Partway


Durable goods orders jumped 0.7% in June on strong gains in machinery and transportation equipment. The increase in transportation equipment was heavily concentrated in defense aircraft and parts, which has long lag times, while orders in the vehicle sector actually fell. The more important capital goods orders excluding defense and aircraft, which track actual business plans, rose Read More »

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Key Factors in New Home Sales Weakness


As discussed in this morning’s Economic Alert by Chief Economist Diane Swonk, new home sales continue to lag expectations. June’s estimate came in 69,000 units under the consensus estimate. The lackluster recovery in new home sales should be cause for concern, in terms of the housing recovery and for the overall economy. There are many issues contributing to the tepid recovery in new home sales: the premium needed to purchase a new home compared to an existing home, Read More »

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New Home Sales Disappoint


New home sales dropped to a 406,000 rate in June and were revised down for the month of May. The biggest losses were in the South, where builders have complained about labor shortages. A shortfall in the South also has a disproportionate effect on the overall figures Read More »

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Home Sales Rise – Still not Enough


Existing home sales finally showed some signs of life in June, crossing the five million unit mark for the first time since last October. Sales for May were also revised up a bit. We still have a long way to go, however, before matching the highs hit last summer Read More »

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Inflation Increases at the Gas Pump


The Consumer Price Index (CPI) rose 0.3% in June, after rising 0.4% in May. Almost all of the increase (2/3) was driven by a sharp (3.3%) jump in prices at the gas pump. Food prices decelerated in June, after increases in previous months; prices at the grocery store were flat after some increase in recent months. Inflation outside of the volatile food and energy categories decelerated Read More »

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Housing Starts Fall Again


Housing starts dropped back below the one-million unit mark to 893,000 in June, while starts for May were revised down. Losses were posted in both single- and multifamily starts. Single-family starts were at the lowest pace in more than a year; that is particularly disappointing given that the bulk of the economic momentum from housing for the job market comes from single-family construction. There are also more spillover effects from spending on single-family units Read More »

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Tepid Production and Mortgage Figures Reinforce Gradualism


Industrial production rose 0.2% in June and was revised down slightly for the month prior. The bulk of the weakness occurred in consumer goods, which had been extremely strong earlier in the quarter. Hopefully, this weakness is transitory as the auto sector and big-ticket consumer goods are expected to provide a tailwind for the economy in the second half of the year. The pent-up demand for big-ticket durables, in particular, accelerated last winter Read More »

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Yellen Defends Gradualism


Federal Reserve Chair Janet Yellen has been succinct in her testimony to the Senate Banking Committee today. She emphasized that weakness in the first quarter was likely transitory, but still worse than anyone expected.  The Fed needs to be mindful on how much it can write off to weather problems. She also cited ongoing problems in the housing market. Read More »

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Retail Sales Better then Headline Suggests


Retail sales rose a tepid 0.2% in June, but were revised up for the month of May. That is the second month in a row that sales were revised up; it means we are behind the curve on a much-needed catch-up in consumer spending following the winter doldrums. Vehicle sales tumbled, Read More »

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