The Monday Morning Quarterback /A quick analysis of important economic data released over the past week
By Elliot D. Pollack & Company
Most of the data this week was good, with disappointing housing and unemployment insurance claims as the exceptions. The poor housing market is one of the reasons the economy is still stalled. No quick fix seems imminent.
Arizona Snapshot
March taxable sales in the state were up 3.4% from a year ago and are up 8.5% year to date. The strongest retail sales categories were construction, wholesale, motor vehicle dealers and miscellaneous auto.
R.L. Brown reported March single-family housing permits in Greater Phoenix were down a whopping 20.8% from a year ago. Year to date, permits are down 18.9%. This poor showing is confounding most observers of the housing market. The analysis that accompanied the permit data was quite good. It discussed the gap between the median new home price and the median resale home price-now $100,000. According to R.L. Brown, this is pushing homebuyers to resale and it is having a chilling effect on new home market share. The spread is so large that the dampening effect is not likely to go away quickly.
U.S. Snapshot
The big improvement in initial jobless claims proved brief with the latest data jumping 24,000 claims to 329,000 in the April 19 week. This is disappointing.
The University of Michigan consumer sentiment index for April was strong. The composite index was at 84.1 vs. 80.0 in March and 76.4 a year ago. The strongest part of the report was the current conditions component that reported a new recovery best 98.7.
Leading indicators was up a higher than expected 0.8% in March following a gain of 0.5% in February (see chart below). March’s gain points to accelerating growth over the next six months.
Manufacturers’ new orders for durable goods were notably positive and topped expectations. They jumped 2.6% in March after a 2.1% gain the month before.
Existing home sales were essentially flat in March, while the growth in home prices moderated. Existing home sales declined 0.2% in March from February and are now 7.5% below year earlier levels. Prices were up 7.9% from a year ago.
New home sales were down by a surprisingly large 13.3% from a year ago in March. Prices are a major factor constraining sales.
