A lack of inventory starved pending home sales. Here are the five four things we learned from U.S. economic data released during the week ending January 1.
Home purchase contract signings dropped in November. The National Association of Realtors’ Pending Home Sales Index (PHSI) slipped 2.6 percent during the month to a seasonally adjusted 125.7 (2001=100). While this was the third straight monthly decline for the index, it also was its best-ever November reading. The PHSI fell in all four Census regions: West (-4.7 percent), Northeast (-3.3 percent), Midwest (-3.1 percent), and South (-1.1 percent). Even with the recent declines, the PHSI was up 16.4 percent from a year earlier, with double-digit year-to-year percentage gains in all four Census regions. The press release tied November’s PHSI decline “to the shortage of inventory and fast-rising home prices.”
Home prices continued to swell this fall. The 20-city Case-Shiller Home Price Index jumped a seasonally adjusted 1.6 percent in October following a 1.4 percent bounce during the prior month. Home prices had been accelerating for much of 2020, with the measure up 7.9 percent over the past 12 months. All of the tracked metro areas had price hikes exceeding one percent, with the largest rises in San Diego (+2.2 percent), Seattle (+2.1 percent), Boston (+1.9 percent), and Cleveland (+1.9 percent). Three metro areas had home price 12-month comparables greater than ten percent: Phoenix (+12.7 percent), Seattle (+11.7 percent), and San Diego (+11.6 percent). The press release noted, “the data from the last several months are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes.”
New jobless claims remained inflated as 2020 came to an end. The Department of Labor reports that there were a seasonally adjusted 787,000 first-time claims made for unemployment insurance benefits during the week ending December 26. While a decline from 806,000 from the week before, initial jobless claims remained well above pre-pandemic levels. There were only 220,000 first-time claims during the same week one year ago. Continuing claims totaled 5.219 million during the week ending December 19, more than triple of that a year earlier. 308,262 people made claims for Pandemic Unemployment Assistance, down 88,686 from the prior week.
Agricultural prices rose in November. The U.S. Department of Agriculture reports that the prices received by farmers surged 4.1 percent during the month, leaving the measure 2.2 percent above year-ago levels. Prices for crops and livestock jumped 3.9 percent and 4.1 percent, respectively. Prices rose for chicken, soybeans, corn, and milk but fell for hogs, turkeys, market eggs, and oranges. Costs of commodities/services, interest, taxes, and wages edged up 0.7 percent during the month, with a 12-month comparable of +1.2 percent.
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What We Learned About the U.S. Economy Last Week 