Category Archives: Economic Alert

New Home Sales Tumble

New home sales dropped unexpectedly to a 384,000-unit pace in March from a 449,000-unit pace in February. Sales plunged the most in the Midwest and South,

Home Sales Remain Weak

Existing home sales were almost unchanged between March and February, which should come as no surprise to those who have been watching the lackluster demand for mortgages since the start of the year. Sales are off almost 15% on a seasonally adjusted basis from the high they hit last July when everyone was scrambling to [...]

Industrial Production is Back

Industrial production jumped 0.7% in March, after being revised up sharply for the month of February. Upward revisions were substantial and attributed to much stronger gains in big-ticket durable goods (including business equipment) and mining. Moreover, gains in March were broad-based in both consumer and business categories

Housing Starts Rebound Slowly

Housing starts rose to a 946,000-unit pace in March, after being revised up slightly for the month of February. With revisions, starts are running close to expectations although they should be stronger given the lack of inventories on the market. That said, it was encouraging to see the gain in starts concentrated in the single-family [...]

Consumer Pulse Still Beating

Retail sales rose 1.1% in March, following upward revisions to February, as consumers came out of hibernation and began to spend again. Vehicle sales were particularly robust, as consumers returned to dealer showrooms and tapped the pent-up demand built during the worst months of winter. We also saw strong gains in building materials and garden [...]

U.S. Trade Deteriorates

The trade deficit widened more than expected in February, as imports rose and exports fell. Imports of vehicles were particularly strong; that could be a problem for domestic vehicle producers going forward even as sales come back, which they did strongly in March. Japanese and Korean producers, in particular, now have unusually large pricing advantages [...]

Construction Activity Remained Weak in February

Construction spending rose 0.1% in February, after being revised down slightly for the month of January. Losses in single-family construction, most likely due to unusually harsh winter weather, offset gains in multifamily construction. Inventories of new single-family homes remain extremely tight. Commercial construction also showed some pockets of weakness, most notably in office construction for [...]

Affordable Care Act Distorts Income and Spending Data Again

Real (inflation-adjusted) disposable income rose 0.3% in February after being revised down to a 0.2% gain for January. A jump in Medicaid payments associated with the Affordable Care Act (ACA) continued to provide a lift for transfer payments during the month, while gains in wages and salaries were more moderate. Real consumer expenditures rose 0.2%,

Durable Goods Post Hollow Gains

Durable goods orders rose a larger-than-expected 2.2% in February. Much of the increase was concentrated in the volatile, lagged orders of aircraft and parts. Orders for motor vehicles and parts were also up after two months of declines, reflecting a bit of a comeback after unusually harsh winter weather took a toll on sales in [...]

New Home Sales Slacken in February

New single-family home sales dropped 3.3% in February to a 440,000-unit annualized rate, the slowest monthly pace since September 2013. Moreover, sales for the month of January were revised lower. More of the weakness in the new home market can be attributed to unusually harsh winter weather; builders in the worst-affected areas were literally sidelined,