ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
May 15th, 2017
The Monday Morning Quarterback
A quick analysis of important economic data released over the past week
While the political picture seems to be getting more blurred by the day, the economic picture continues to be good. Estimates for real GDP suggest that growth will remain in the low to mid 2% range in both 2017 and 2018. Unemployment claims continue to decline. This indicates that employment markets remain strong. Consumer sentiment also remains strong and retail sales in April rebounded from the March malaise. In addition, consumer prices were in line with the FED’s goal. Thus, at least so far, the tumult caused by the ongoing craziness between the two major parties has not prevented the current period of moderate economic strength from continuing.
Arizona Snapshot:
- According to the Greater Phoenix multiple listing service (ARMLS), the median price of a single family home sold was $249,000. That’s up from $245,000 in March and $235,500 a year ago.
- The month’s supply of homes for sale on ARMLS was 2.7 in April. This is the same as in March but down from 3.2 a year ago. This is good news for sellers.
- In Greater Tucson, the median price of a single family home sold on MLS in April was $212,900. This compares to $214,000 in March and $192,500 a year ago.
U.S. Snapshot:
- Initial jobs claims fell by 2,000 to 236,000 in the week of May 6. The 4-week average is up slightly from 243,000 but is still down from early April and late March. Continuing claims are down to a 29-year low. Overall, the labor market has been the economy’s leading strength this year and the current report points to more of the same ahead as employers stick with the employees.
- The latest forecast from the U.S. Blue Chip consensus shows the panel believes that real GDP growth in 2017 will be around 2.1% despite the anemic 1st quarter (0.7% seasonally adjusted annual rate). This is down from last month’s expectation of 2.2%. For 2018, the panel expects growth in real GDP of 2.4%. This number is unchanged from recent forecasts.
- The University of Michigan measure of consumer sentiment remained strong in May. The level of 97.7 (compared to 97.0 in April and 94.7 a year ago) exceeded expectations.
- Advance estimates of U.S. retail and food services sales for April increased 0.4% from March and were 4.5% above year earlier levels. The monthly rate of growth was up from the revised 0.1% reported in March.
- The inventories to sales ratio for manufacturing and trade remained at 1.35 in March. This is the same level as in February and down from 1.40 reported a year ago. This was a satisfactory outcome as total sales, while flat for the month, were 6.5% over a year ago while inventories grew by 0.2% for the month but were up only 2.6% from a year ago. If the ratio gets too high, a correction in inventories would be necessary. Such an event could force a slowdown in production of goods. Thus, a reduction in the ratio is healthy. At present, most excess inventories are in the auto sector.
- Consumer prices (CPI-U) increased 0.2% in April on a seasonally adjusted basis and now stand 2.2% above a year ago. The index for all items less food and energy increased 0.1% in April after declining in March. That index now stands 1.9% above year earlier levels.
- 30-year fixed rate mortgages averaged 4.05% last week. Thus, mortgage rates have remained in a very narrow range over the past month.
