05/02/2011
In the News
Last week's economic headlines started off with some encouraging real estate news: Sales of new single-family houses during March 2011 reached an annual rate of 300,000, which was 11.1 percent over February's revised rate of 270,000, according to the latest figures from the Census Bureau.
That said, real estate still has a way to go in comparison to last year. March's rate was 21.9 percent below the March 2010 estimate of 384,000.
In terms of price, the median sales price of new houses sold in March 2011 was $213,800 and the average sales price was $246,800. In terms of supply, the estimate of new houses for sale at the end of March was 183,000, which represents a 7.3-month supply at the current sales rate.
Real gross domestic product — the output of goods and services produced by U.S. businesses and labor — increased at an annual rate of 1.8 percent in the first quarter of 2011, according to advanced figures from the Bureau of Economic Analysis. This was a tapering of Q4 2010's GDP gains, which increased 3.1 percent.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports and nonresidential fixed investment. These gains were partly offset by negative contributions from federal government spending and state and local government spending. The bureau also noted that a sharp increase in imports and a deceleration in personal consumption negatively impacted GDP totals, thus tapering the GDP gains.
After a string of weekly decreases, jobless claims were up, according to the Employment and Training Administration's latest report last week. Unemployment insurance claims for the week ending April 23 were at 429,000, an increase of 25,000 from the previous week's revised figure of 404,000. The four-week moving average was 408,500, an increase of 9,250 from the previous week's revised average of 399,250, the administration reported.
That said, the advance total for insured unemployed workers during the week ending April 16 was 3,641,000, a decrease of 68,000 from the preceding week's revised level of 3,709,000. The four-week moving average was 3,697,750, a decrease of 22,750 from the preceding week's revised average of 3,720,500.
While many analysts had expected a slowing in the growth of GDP due to tough winter weather and increasing energy costs during the first quarter, the recent increase in unemployment benefits claims gave some reason to point to a shaky recovery.
"On both economic growth and jobs, we're seeing some retrenchment," Sung Won Sohn, an economist at Cal State Channel Islands, told the Los Angeles Times. He added that where energy prices were concerned, "It could get worse in the second quarter."
While some economists might have been worrying about the economy, consumers were slightly more upbeat. The Conference Board's Consumer Confidence Index, which was down for March, improved in April. April's index hit 65.4 (1985=100), up from March's 63.8. The Present Situation Index, how consumers feel about the current economy, increased to 39.6 from 37.5; and the Expectations Index, how consumers feel the economy will go, rose to 82.6 from 81.3.
"Consumers' short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Inflation expectations, which had spiked, retreated somewhat in April. Although confidence remains weak, consumers' assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues."
This week's financial news starts today with construction spending data for March from the Census Bureau, as well as U.S. car and truck sales data for May from the auto manufacturers. The Census Bureau follows up on Wednesday with factory orders figures for March.
On Thursday, the Employment Training Administration will release jobless claims data for the week ending April 23, and the Bureau of Labor Statistics will release figures for non-farm productivity for the first quarter.
Friday caps off the week with April's non-farm payrolls figures from the Bureau of Labor Statistics, as well as April's unemployment rate, hourly earnings and average workweek, also from the Bureau. The Federal Reserve will wrap things up with its consumer credit data for March.
