Elliott D. Pollack & Co.
The Monday Morning Quarterback / A quick analysis of important economic data released over the last week
The recovery continues. While a significant missing piece, construction, remains weak, the general direction for the overall economy remains upward. That trend, however, is not strong enough to cause inflation to be a problem despite rapid growth in the reserves and money supply. In other words, more of the same.
Arizona Snapshot
Maricopa County taxable retail sales were up 2.2% in June when compared to a year ago. This is a significant slowdown in momentum. Hopefully, this will prove to be transitory.
New home permits in Greater Phoenix were 1,024 in July. This is down from 1,190 a year ago. Year-to-date (through July), there have been 6,783 permits. This is down 15.6% from the 8,032 homes permitted over the first seven months of 2013. Median new home prices were down 0.6% in July compared to June. June was down 4.3% compared to May.
In Greater Tucson, there were 177 new home permits for the month. This is down 10.6% from a year ago. Year-to-date, there have been 1,311 permits. This is down 6.8% when compared to the first seven months of 2013. Median new home prices were $246,954, up 2.9% from a year earlier. Median resale prices for Greater Tucson were $180,000. This is up 9.1% from a year ago.
U.S. Snapshot
Leading indicators were up sharply in July. They are up 7.0% over a year ago and are up 0.9% over June. This is a strong showing (see chart below). The drop in unemployment claims, yield spread and building permits were all strong factors for strength last month.
Consumer prices were up only modestly in July. Overall consumer prices rose 0.1% in July after a strong 0.3% boost in June. Overall, prices are up 2.0% over the last year. This is right in line with the Fed’s target.
Housing may be making a comeback. This being led by the improving labor market and awareness that the Fed is cutting back on mortgage backed securities, suggesting a pending rise in mortgage rates. Housing starts for July jumped to an annualized rate of 1.093 million in July. This is up from 945,000 in June. Multifamily lead the way with a 28.9% surge but single family was also up a healthy 8.3%.
Existing home sales rose 2.4% in July compared to June. Sales are down 4.3%, though, compared to a year ago. Month over month, home prices were flat. Over the past year, they have increased 4.9%.
