16 June 2019

Jobs And Factory Data Improves, Housing Slows

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Unemployment benefits claims were near a three-month low last week and factory activity in the Mid-Atlantic region showed a strong resurgence suggesting the economy is regaining some strength. But housing sales were at a 1½ year low in February due to a low supply of home inventory.

Much of the recent negative economic indicators has been blamed on bad winter weather. Federal Reserve Chair Janet Yellen on Wednesday said the unusually cold and snowy winter played a big role in disrupting economic activity, and she suggested a rebound was coming.

Job Market Improves 

Initial claims for state unemployment benefits increased 5,000 to a seasonally adjusted 320,000 last week, the Department of Labor reported. The rise, which was smaller than economists had expected, kept claims close to the three-month low hit in the prior week. A four-week moving average of new claims, which cuts volatility to provide a better gauge of underlying conditions, hit its lowest level in more than three months.

In a separate report, the Philadelphia Federal Reserve Bank said its business activity index rebounded to 9.0 in March from -6.3 in February. Any reading above zero indicates expansion in the region's manufacturing.

The report, which covers eastern Pennsylvania, southern New Jersey and Delaware, showed a rebound in new and unfilled orders at factories in the region. Shipments also bounced back, but inventories fell. Employers opted to increase hours for existing workers rather than expand payrolls.

Housing Market Sluggish 

Though sales of previously owned homes fell again in February there is optimism they will pick up as better weather returns. The National Association of Realtors said existing home sales slipped 0.4 percent to an annual rate of 4.60 million units. That was the lowest level since July 2012.

While the weather has hampered sales, a run-up in mortgage rates and prices has also taken a toll. Additionally, low inventories of listed properties has given buyers little to choose from. Supply did rise in February to 5.2 months’ worth, which is the highest in nearly 12 months.  

The 30-year fixed mortgage rate has dropped from a peak of 4.49 percent in September to about 4.30 percent in February, but it is still a full percentage point higher than it was a year ago.

The median price for a previously owned home rose 9.1 percent in February from a year earlier.

Click here for the original article from Reuters. 

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