{"id":1535,"date":"2019-05-23T12:02:11","date_gmt":"2019-05-23T16:02:11","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1535"},"modified":"2019-05-23T12:02:11","modified_gmt":"2019-05-23T16:02:11","slug":"april-new-home-sales-and-weekly-jobless-claims","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1535","title":{"rendered":"April New Home Sales and Weekly Jobless Claims"},"content":{"rendered":"\n

KEY DATA:<\/strong> New Home Sales: -6.9%;\nOver-Year: +7%; Prices: 8.8%\/ Claims: -1,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cThe new home market is doing better than the\nexisting home sector, but neither is in great shape.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  Earlier this week we saw that existing home\nsales dropped in April, despite easing mortgage rates and today it was reported\nthat new home demand also dropped. <\/em><\/strong> However, the decline in new home sales came\nafter a huge jump in March, so what we really have is a movement back toward a\nmore realistic level.  Unfortunately,\nthat level is not particularly high. \nIndeed, we need about a fifteen percent rise in purchases before we can categorize\nthe new home sales pace as strong. <\/em><\/strong> Nevertheless, sales are on the upswing and\nwe could see a double-digit increase over the 2018 totals.<\/em><\/strong> So far this\nyear, total sales were up nearly seven percent and given how soft they were in\nthe second half of last year, it would take a collapse in demand not to get at\nleast a ten percent rise.  As for the\nApril report details, the one region reporting a rise was the Northeast, but\nthat area makes up only about five percent of the total.  The other three regions were down\nsharply.  The median price jumped<\/em><\/strong>,\nbut I would be cautious about the number. \nThe distribution of sales across the price ranges has been strangely\nvolatile the last few months, so let\u2019s see what happens when things settle\ndown.   <\/p>\n\n\n\n

New unemployment claims remain at incredibly low\nlevels, a sign that the labor market remains extremely tight. <\/em><\/strong><\/p>\n\n\n\n

There were a couple of other reports released today\nthat need to be looked at carefully.  The\nApril IHS Market manufacturing index fell to its lowest level since September\n2009 while the services index dropped to its lowest point in over three\nyears.  We\u2019ve known for a while that\nmanufacturing is hurting but services may be following in its footsteps.<\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  The\nnew home market may be outperforming the existing home market, but together,\nhousing is not really doing much for the economy.  In addition, more and more data are pointing\nto troubles in manufacturing<\/em><\/strong>, in no small part because of trade\nissues.  And welfare payments are holding\nup the farm sector, which could get crushed once again by the tariff war.  Yet the labor market continues to boom and\nCEO surveys point to business leaders being almost irrationally exuberant.<\/em><\/strong>  In addition, households are pretty happy as\nwell.  So, what is going on? <\/em><\/strong> I guess it is time for my favorite saying:\n\u201cYou tell me and we both know!\u201d  I\nhave growth below two percent this quarter but I am somewhat below\nconsensus.  On the other hand, I haven\u2019t\nseen a whole lot of 3% estimates.  <\/em><\/strong>Households\ncontinue to hold the key to the economic kingdom.  April vehicle sales were pathetic and if we\ndon\u2019t see a sharp rebound in May, consumption could be really\ndisappointing.  That would make it\nextremely hard to get to two percent growth, so I am sticking with my\nforecast.  The minutes of the last FOMC\nmeeting indicated the members were more upbeat about growth.  Even so, they don\u2019t expect to raise rates\nthis year and a slowing in growth would only support that. <\/em><\/strong> It would likely take at least two\nconsecutive sub-two percent quarters to create a rate cut groundswell.  So, rates are likely to remain steady for\nquite some time.  <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: New Home Sales: -6.9%; Over-Year: +7%; Prices: 8.8%\/ Claims: -1,000 IN A NUTSHELL:  \u201cThe new home market is doing better than the existing home sector, but neither is in great shape.\u201d WHAT IT MEANS:  Earlier this week we saw that existing home sales dropped in April, despite easing mortgage rates and today it … Continue reading April New Home Sales and Weekly Jobless Claims<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1535","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1535"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1535\/revisions"}],"predecessor-version":[{"id":1536,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1535\/revisions\/1536"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}