Shaking Off the Winter Blues: April 19 – 23

More data show building momentum within the U.S. economy. Here are the five things we learned from U.S. economic data released during the week ending April 23.


Economic activity more than made up for February’s drop in March. The Chicago Fed National Activity Index (CFNAI) swelled by 291-basis points during the month to a reading of +1.71. This was the CFNAI’s highest reading since last July and is indicative of above-average economic growth. The 70 of the CFNAI’s 85 components made positive contributions to the headline index during the month, with all four major categories in positive territories and indicating improvements from February.  Production-related indicators rose from a -1.04 reading in February to +0.63 in March. Also increasing were indicators for personal consumption/housing (-0.21 to +0.63), employment (+0.12 to +0.34), and sales/orders/inventories (-0.06 to +0.11). The CFNAI’s three-month moving average jumped by 47-basis points to +0.54. A reading between 0.00 and +0.70 suggests that the U.S. economy is expanding above its historical average without sustained increasing inflation.

Forward-looking measures point towards surging economic activity. The Conference Board’s Leading Economic Index (LEI) jumped 1.3 percent in March to a reading of 111.6 (2016=100). The LEI was up 7.9 percent from a year earlier as all ten index components made positive contributions in March (led by jobless claims, new manufacturing orders, and the interest rate spread). The coincident index (CEI) grew by 6/10ths of a point to 104.0 (-1.1 percent versus March 2020). All four CEI components positively contributed to the index in March. The lagging index lost a half-point to 105.1, which was down 5.5 percent from a year earlier). The Conference Board now expects a very robust 6.0 percent rate of economic growth for all of 2021.

Sales of previously owned homes remained strong in March even after a small slip. The National Association of Realtors finds existing home sales decreased 3.7 percent during the month to a seasonally adjusted annualized rate (SAAR) of 6.010 million units. Even with the decline, home sales were up 12.3 percent from a year earlier and have remained above an annualized 6 million home pace for six straight months. Sales fell in March (while also staying ahead of their respective March 2020 paces) in all four Census regions. The main culprit remained a lack of inventory—while the 1.070 million homes available for sale at the end of the month was up 3.9 percent from February, the count was off 28.2 percent from a year earlier and represented a paltry 2.1 month supply. As a result, the median sales price of $329,100 was up a stunning 17.2 percent from a year earlier. The press release noted that “sales for March would have been measurably higher had there been more inventory.”

Housing starts surged to a 15-year high in March. The Census Bureau estimates housing starts rose 19.4 percent during the month to a seasonally adjusted annualized rate of 1.739 million units (+37.0 percent versus March 2020). This followed a huge weather-caused drop in February and placed starts at their fastest pace since June 2006. Single-family home starts advanced 15.3 percent while those of multi-family units jumped 30.0 percent. Looking towards the future, the annualized count of issued building permits increased 2.7 percent to 1.720 million (+30.2 percent versus March 2020), with single-family home permits growing 4.6 percent. Completions surged 16.6 percent to an annualized 1.580 million homes, 23.4 percent ahead of its year-ago pace.

Jobless claims fell to a pandemic low in mid-April. The Department of Labor reports that there were a seasonally adjusted 547,000 first-time claims made for unemployment insurance benefits during the week ending April 17. This was down 39,000 from the prior week and the fewest since the beginning of the COVID-19 pandemic. There were 4.202 million initial jobless claims during the same week one year earlier. The measure’s four-week moving average fell by 27,750 to 651,000.

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

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