Home Sales Remained Hot, Retail Sales Cooled: November 16 – 20

The housing market continued to cook this fall. Here are the five things we learned from U.S. economic data released during the week ending November 20.


Existing home sales jumped to a 14-year high in October. The National Association of Realtors indicates that sales of previously owned homes rose for a fifth straight month to a seasonally adjusted annualized rate of 6.85 million units. Existing home sales swelled 26.6 percent versus a year earlier, with 12-month comparables greater than 20 percent in all four Census regions. Holding back even more transactions were a shortage of homes on the market: There were 1.42 million homes on the market at the end of October, down 7.4 percent from September, off 35.9 percent from a year earlier, and translating into a mere 2.5 month supply. NAR estimates more than seven in ten homes sold in October were on the market for less than a month. The median sales price of $313,000 was up a startling 15.5 percent from a year earlier.

Builders started more homes in October. Housing starts grew 4.9 percent during the month to a seasonally adjusted annualized rate (SAAR) of 1.53 million units (+14.2 percent versus October 2019). The Census Bureau data also show that single-family home starts jumped 6.4 percent while the same for multi-family units fell 3.2 percent. Looking towards the future, the annualized count of issued building permits held steady for the month at 1.545 million (+2.8 percent versus October 2019), split between a 0.6 percent gain for single-family homes and a 5.9 percent drop for multi-family units. Completions fell 4.5 percent during the month but remained 5.4 percent ahead of year-ago levels to an annualized 1.343 million units.

Retail sales growth slowed sharply in October. The Census Bureau estimates retail and food services sales grew 0.3 percent during the month to a seasonally adjusted $553.3 billion. While October’s advance was much smaller than the prior month’s 1.6 percent gain, retail sales were a robust 5.7 percent ahead of year-ago levels. Sales at both auto dealers/parts stores and gas stations increased 0.4 percent. Net of both, core retail sales managed a 0.2 percent gain in October and have grown 6.5 percent over the past year. Sales rose in October at retailers focused on electronics/appliances (+1.2 percent) and building materials (+0.9 percent). Falling were sales at retailers focused on apparel (-4.2 percent), sporting goods/hobbies (-4.2 percent), groceries (-0.4 percent), furniture (-0.4 percent), and health/personal care (-0.1 percent). Sales plummeted 4.6 percent at department stores but rose 3.1 percent at nonstore (internet) retailers.

Forward-looking indicators suggest moderate economic growth this winter. The Conference Board’s Leading Economic Index (LEI) added 7/10ths of a point in October (matching September’s advance) to a reading of 108.1. Even after seven consecutive monthly gains, the LEI was 2.9 percent below its year-ago mark. Seven of ten LEI components made positive contributions during the month, led by new manufacturing orders and jobless claims. The coincident index moved forward by a half-point to a reading of 102.7, which was nevertheless off 3.8 percent from October 2019. All four components of the coincident index made positive contributions, including nonfarm payrolls and industrial production. The lagging index inched up by 1/10th of a point to 107.1, down 1.3 percent from a year earlier. The press release stated that the LEI reading “suggests growth will moderate significantly in the final months of 2020.”  

Manufacturing production picked up in October. The Federal Reserve reports that manufacturing output swelled a seasonally adjusted 1.0 percent during the month after having eked up a 0.1 percent advance in September. Durable goods production increased 0.9 percent while nondurables output rose 1.2 percent. Overall industrial production gained 1.1 percent in October after shrinking 0.4 percent during the prior month. Mining output fell 0.6 percent (and was off 14.4 percent from a year earlier) while production at utilities surged 3.9 percent (thanks to increased demand for electricity). Manufacturing output remained 3.9 percent smaller than that of October 2019, while the 12-month comparable for overall industrial production was -5.3 percent.

Other U.S. economic data released over the past week:

  • Jobless Claims (Week ending November 14, First-Time Claims, seasonally adjusted): 742,000 (+31,000 vs. the previous week, +519,000 vs. the same week a year earlier). 4-week moving average: 742,000 (+339.6% vs. the same week a year earlier).
  • Import Prices (October 2020, All Imports, not seasonally adjusted): -0.1% vs. September 2020, -1.0% vs. October 2019. Nonfuel Imports: +0.1% vs. September 2020, +1.7% vs. October 2019.
  • Export Prices (October 2020, All Exports, not seasonally adjusted): +0.2% vs. September 2020, -1.6% vs. October 2019. Nonagricultural Exports: Unchanged vs. September 2020, -2.0% vs October 2019.
  • Housing Market Index (November 2020, Index (>50=More Homebuilders See Housing Market as “Good” Vs. “Poor,” seasonally adjusted): 90 (vs. October 2020: 85; vs. September 2019: 71).
  • Business Inventories (September 2020, Manufacturers’ and Trade Inventories, seasonally adjusted): $1.933 trillion (+0.7% vs. August 2020, -4.7% vs. September 2019).
  • State Employment (October 2020, Nonfarm Payrolls, seasonally adjusted): Vs. September 2020: Payrolls Increased in 32 states, Decreased in 2 states, and essentially unchanged in 16 states and the District of Columbia. Vs. October 2019: Decreased in 48 states and the District of Columbia and essentially unchanged in 2 states.
  • Treasury International Capital Flows (September 2020, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$58.6 billion (vs. August 2020: +$7.8 billion, September 2019: +$50.6 billion).

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

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