Economic Roundup: March 28, 2011



In the News

February home sales data was the lead economic story last week, with sales of both new and existing homes down for the month.
Sales of existing single-family homes, townhomes, condominiums and co-ops dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February, down from an upwardly revised 5.40 million in January, according to figures released by the National Association of REALTORS® (NAR) last week. February's sales were 2.8 percent below the 5.02 million pace of February 2010.
"Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," warned NAR chief economist Lawrence Yu. "This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July."
Meanwhile, sales of new single-family homes in February dropped to a seasonally adjusted annual rate of 250,000, according to last week's figures from the Census Bureau. This was a sizable 16.9 percent below January's revised rate of 301,000 and 28 percent below February 2010's estimate of 347,000.
In terms of pricing, the national median existing-home price for all housing types was $156,100 in February, which was 5.2 percent below February 2010, according to NAR. The median sales price of new houses sold in February was $202,100; the average sales price was $246,000, according to the Census Bureau.
In terms of inventory, NAR reported 3.49 million existing homes available for sale at the end of February, which represents an 8.6-month supply. The Census Bureau reported that the seasonally adjusted estimate of new homes for sale at the end of February was 186,000, representing a supply of 8.9 months.
Durable goods orders for February were another important financial headline last week, showing a 0.9 percent drop from January to $200 billion, after January showed a 3.6 percent increase. Machinery, down two consecutive months, had the largest decrease, $1.2 billion or 4.2 percent to $26.6 billion.
That said, shipments of manufactured durable goods in February increased $0.7 billion or 0.3 percent to $203.2 billion. This followed January's 0.2 percent increase. Interestingly, machinery held the top spot for shipments, showing a 2.6 percent increase to $26.1 billion.
Initial jobless claims for the week ending March 19 dipped to 382,000, a decrease of 5,000 from the previous week's revised figure of 387,000, according to figures released by the Employment and Training Administration last week. The four-week moving average was 385,250 claims, a decrease of 1,500 from the previous week's revised average of 386,750.
This week's financial news starts off Monday with personal income and spending data for February from the Bureau of Economic Analysis. Experts expect growth, but it will be tapered from January's gains.
Tuesday will see March's consumer confidence data from the Conference Board, followed on Thursday with initial jobless claims data for last week from the Employment and Training Administration. Also on Thursday the Census Bureau will release factory order data for March.
Friday ends the week with a series of important economic announcements: March's non-farm payrolls, hourly earnings and average workweek from the Bureau of Labor Statistics; the unemployment rate for March from the Bureau of Labor Statistics; and February construction spending from the Census Bureau.




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