Consensus for Jobless Claims, Existing Home Sales and Leading Indicators- Thursday 23.09.2010
Initial jobless claims for the September 11 week dipped 3,000 to 450,000 for the lowest total since July. The four-week average posted its sharpest decrease of the year, down 13,500 to a 464,750 level that is about 20,000 lower than mid-month August. However, the latest claims may have been affected by the shortened Labor Day week. Weekly seasonal adjustment is less reliable than monthly-there is more volatility in the underlying numbers.
Existing Home Sales
Existing home sales plunged a monthly 27.2 percent in July to a 3.83 million annual rate for the lowest level in 15 years. This was in sharp contrast to the recent high of 6.49 million annualized units in November 2009 and 5.79 million units in April of this year. These two months were boosted, however, by deadlines to qualify for special tax credits for homebuyers. Clearly, many home purchases were moved forward to claim the tax credits, leaving a gap in demand after the incentives ended. Looking ahead, we might see further improvement in August for existing home as pending home sales (based on contract signings) rebounded 5.2 percent in July and some of those will close in August.
The Conference Board’s index of leading indicators made a modest comeback in July, suggesting that forward momentum for the economy continues. The index of leading economic indicators rose 0.1 percent in July after dipping 0.3 percent the month before. A positive in the latest leading indicators report was a 0.2 percent rise in the coincident index which more than reversed June’s 0.1 percent drop. This suggests that the economy is not now in recession but merely in a slow growth period.