Sales of existing homes unexpectedly rose by 3.9% in February, the largest monthly gain in three years, the National Association of Realtors reported March 23. The price of a median home sold last month dropped to $212,800, down by 1.3% from the same month in 2006, marking a record seven straight months that the median home price has fallen.
Construction of new homes and apartments rose 9% in February to a seasonally adjusted annual rate of 1.53 million units, the Commerce Department reported March 20. Construction had fallen by 14.3% in January. Even with the better-than-expected rebound, construction activity remained 28.5% below last year's level.
Builders' applications for new permits, considered a reliable gauge of future activity, continued falling in February, dropping by 2.5% to an annual rate of 1.53 million units. That marked the 12th decline in the past 13 months in building permits.
Federal Reserve policymakers announced on March 21 that they would leave the central bank's key federal funds rate -- the rate that banks charge one another for overnight loans -- at 5.25%, where it has remained since June 2006.
The Conference Board's Composite Index of Leading Economic Indicators slipped 0.5% in February. The drop, while expected, was the steepest since February 2006. The index is important because it often foreshadows the performance of the economy over the next six to nine months.
This week look for updates on new home sales on March 26 and durable goods orders on March 28.
Monday, March 26, 2007
Tuesday, March 13, 2007
Economic Update - 3/13/2007
The nation's unemployment rate dipped to 4.5% in February, as employers added 97,000 jobs to their payrolls, close to economists' forecast for a gain of approximately 100,000, the Labor Department reported March 9. Unemployment fell despite bad winter weather that forced construction companies to slash 62,000 jobs, the most since 1991.
The Labor Department also reported that the number of laid-off workers filing unemployment claims fell by 10,000 for the week ended March 2. The decline provided a break from a recent rise in layoffs stemming from a weakness in the housing and auto sectors.
Former Federal Reserve Chairman Alan Greenspan said there was a "one-third probability" of recession in the United States this year, according to a March 6 interview with Bloomberg news service. His comments contrasted with those of current Federal Reserve Chairman Ben Bernanke, who said that the Federal Reserve continues to foresee "moderate growth going forward."
The nation's trade deficit narrowed slightly to $59.1 billion in January, down 3.8% from a December deficit of $61.5 billion. Exports of goods and services rose by 1.1% to an all-time high of $126.7 billion in January, reflecting gains in sales of airplanes, computers and farm products.
Rates on 30-year mortgages fell to their lowest level since mid-December, as investors moved to the safety of bonds after last week's stock market turmoil. Typically, more money flowing into the bond market makes more money available for mortgage lending.
This week look for updates on producer prices on March 15 and consumer prices on March 16.
The Labor Department also reported that the number of laid-off workers filing unemployment claims fell by 10,000 for the week ended March 2. The decline provided a break from a recent rise in layoffs stemming from a weakness in the housing and auto sectors.
Former Federal Reserve Chairman Alan Greenspan said there was a "one-third probability" of recession in the United States this year, according to a March 6 interview with Bloomberg news service. His comments contrasted with those of current Federal Reserve Chairman Ben Bernanke, who said that the Federal Reserve continues to foresee "moderate growth going forward."
The nation's trade deficit narrowed slightly to $59.1 billion in January, down 3.8% from a December deficit of $61.5 billion. Exports of goods and services rose by 1.1% to an all-time high of $126.7 billion in January, reflecting gains in sales of airplanes, computers and farm products.
Rates on 30-year mortgages fell to their lowest level since mid-December, as investors moved to the safety of bonds after last week's stock market turmoil. Typically, more money flowing into the bond market makes more money available for mortgage lending.
This week look for updates on producer prices on March 15 and consumer prices on March 16.
Monday, March 5, 2007
Economic Update - 3/5/2007
Bolstered by bonus payments to high-income executives and pay raises for federal workers, personal incomes rose 1% in January, the largest advance since a 1.3% jump in January 2006, the Commerce Department reported March 1. The extra income helped support a better-than-expected 0.5% increase in consumer spending, the major force driving the U.S. economy.
The Institute for Supply Management's manufacturing index, which measures the nation's manufacturing activity, climbed to 52.3 in February, beating Wall Street's expectation of 50 and January's reading of 49.3. A reading above 50 indicates growth in the sector.
Sales of existing homes in January rose 3%, the biggest one-month increase in two years, the National Association of Realtors reported February 27. Median home prices, however, fell 3.1% from a year ago, the sixth straight monthly decline.
Sales of new homes dropped 16.6% in January, the sharpest monthly decline in 13 years, the Commerce Department said February 28. Yet, the median sales price of a new home rose $400 to $239,800 in January. The backlog of unsold new homes rose from a 5.7 months' supply in December to a 6.8 months' supply in January.
Meanwhile, the New York-based Conference Board said its Consumer Confidence Index increased to a rousing 112.5 in February, its highest level in five years. The better-than-expected gain reflected increased optimism about jobs and business prospects.
For the week ended February 28, interest rates on 30-year mortgages fell for a second straight week to the lowest level since the start of the year.
This week look for updates on February unemployment and the trade deficit on March 9.
The Institute for Supply Management's manufacturing index, which measures the nation's manufacturing activity, climbed to 52.3 in February, beating Wall Street's expectation of 50 and January's reading of 49.3. A reading above 50 indicates growth in the sector.
Sales of existing homes in January rose 3%, the biggest one-month increase in two years, the National Association of Realtors reported February 27. Median home prices, however, fell 3.1% from a year ago, the sixth straight monthly decline.
Sales of new homes dropped 16.6% in January, the sharpest monthly decline in 13 years, the Commerce Department said February 28. Yet, the median sales price of a new home rose $400 to $239,800 in January. The backlog of unsold new homes rose from a 5.7 months' supply in December to a 6.8 months' supply in January.
Meanwhile, the New York-based Conference Board said its Consumer Confidence Index increased to a rousing 112.5 in February, its highest level in five years. The better-than-expected gain reflected increased optimism about jobs and business prospects.
For the week ended February 28, interest rates on 30-year mortgages fell for a second straight week to the lowest level since the start of the year.
This week look for updates on February unemployment and the trade deficit on March 9.
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