Last Week’s Economic News in Review
February 3, 2021
New home sales rose, while layoffs declined and consumer confidence rose slightly.
New Home Sales
Sales of new, single-family homes rose to an annual rate of 842,000 in December, which was 1.6 percent up from November’s pace of 829,000, the Census Bureau and the Department of Housing and Urban Development reported last week. That said, December’s gain was well off from economists’ expectations of a rise to an annual rate of 875,000.
When compared to the same period a year ago, December’s sales rose 18.8 percent over Decembers 2019’s rate of 683,000, with roughly 811,000 new homes were sold over the course of 2020.
Looking at pricing, the median price for new single-family homes sold in December was $355,900, which was 8.01 percent higher than December 2019’s median price of $329,500
In terms of inventory, the estimated number of new homes for sale at the end of December totaled 302,000, representing a 4.3-month supply at December’s sales rate.
Initial Jobless Claims
Looking at weekly layoffs data, initial jobless claims filed by recently unemployed Americans during the week ending January 23rd dropped to 847,000, a decline of 67,000 claims from the previous week’s 914,000 claims, the Employment and Training Administration reported last week.
The four-week moving average, which is considered a more stable measure of jobless claims, rose to 868,000, which was 16,250 claims higher than the preceding week’s average of 851,750 claims.
“Filings fell more than expected last week,” noted Rubeela Farooqi, chief U.S. economist at High Frequency Economics, in a public statement. “Even so, layoffs are ongoing at an elevated pace. Conditions will remain weak, and recovery will be slow until infections can be curbed and the economy can reopen more completely.”
Consumer Confidence
The Consumer Confidence Index ticked up to 89.3 in January from 87.1 in December (a baseline of 100 was set in 1985), according to last week’s report from The Conference Board.
The Present Situation Index, which measures consumers’ outlook on current income, business and job market conditions, fell to 84.4 in January from 87.2 in December. However, the Expectations Index, which gauges consumers’ short-term outlook for the economy and their place in it, grew to 92.5 in January from 87.0 in December.
The percentage of consumers stating that business conditions were “good” increased to 15.8 percent in January from 15.4 percent in December. However, those reporting they felt business conditions were “bad” also grew to 42.8 percent in January from 39.7 percent in December.
“Consumers’ appraisal of present-day conditions weakened further in January, with COVID-19 still the major suppressor,” noted Lynn Franco, senior director of Economic Indicators for The Conference Board, in comments accompanying the release. “Consumers’ expectations for the economy and jobs, however, advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future. In addition, the percent of consumers who said they intend to purchase a home in the next six months improved, suggesting that the pace of home sales should remain robust in early 2021.”
This week, we can expect:
Monday – Construction spending for December from the Census Bureau and the Department of Housing and Urban Development; car and truck sales for January from the auto manufacturers.
Thursday – Initial jobless claims for last week from the Employment and Training Administration; factory orders for December from the Census Bureau.
Friday – Payrolls, unemployment rate, and hourly earnings for January from the Bureau of Labor Statistics; trade deficit for December from the Bureau of Economic Analysis; consumer credit for December from the Federal Reserve.
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Mission San Jose Mortgage
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