A Robust 2022: January 17 – 21

2022 continues to look bright. Here are the five things we learned from U.S. economic data released during the week ending January 21. 


Forward-looking data was on a “rising trajectory” as 2021 ended. The Conference Board’s Leading Economic Index (LEI) jumped 0.8 percent in December, greater than the 0.7 rises in October and November. The LEI has advanced 4.0 percent over the past six months. Eight on ten LEI components made positive contributions to the index, led by building permits, jobless claims, and the interest rate spread. The coincident index moved up 0.2 percent in December and has risen 1.3 percent since June. Three of four coincident measures added to its December advance. The lagging index also grew 0.2 percent, with three of seven components making positive contributions. The group expects the U.S. economy will expand by “a robust” 3.5 percent in 2022.

Previously owned home sales dropped in December. Existing home sales declined 4.6 percent to a seasonally adjusted annualized rate (SAAR) of 6.18 million (-7.1 percent). Nonetheless, the National Association of Realtors’ data series has remained at/above 6 million for five of the past six months. Sales fell in all four Census regions. A lack of inventory continues to vex the housing market. The 910,000 homes available for sale at the end of the month (-18.0 percent versus November 2021) represented a record-low 1.8 month supply. Related, the median sales price of $358,000 was up 15.8 percent from a year earlier. 

Housing starts remained near recent highs in December. The Census Bureau reports housing starts edged up 1.4 percent during the month to a seasonally adjusted annualized rate (SAAR) of 1.702 million (+2.5 percent versus December 2020). Single-family home starts slumped 2.3 percent in December, while those of multi-family units rose 13.7 percent. 2021’s total number of starts, 1,595,100, represented a 15.6 percent increase from 2020. Looking towards the future, the number of issued building permits jumped 9.1 percent during the month to an annualized 1.717 million (+6.5 percent versus December 2020). Not keeping up were completions, which fell 8.7 percent in December to an annualized 1.295 million. Still, the 1.337,800 completed in 2021 was up 4.0 percent from the prior year. 

Homebuilder sentiment remained strong during the opening days of 2022. The National Association of Homebuilders’ Housing Market Index (HMI) slipped by one point to a seasonally adjusted reading of 83. The HMI has been above a reading of 50—meaning that more home builders see the market as “good” than “bad”—every month since May 2020. The HMI lost ground in three of for Census regions, with the West being the outlier. The measure for sales of single-family held steady at 90, while measures for both expected sales (83) and traffic of prospective buyers (69) both shed two points in January. The press release noted that builders are dealing with “constraints, namely cost/availability of materials, labor and lots.”

Jobless claims jumped in mid-January. The Department of Labor reports that there were a seasonally adjusted 286,000 first-time claims made for unemployment insurance benefits during the week ending January 15. This represented an increase of 55,000 from the prior week and 98,000 from the recent low in early December. But the picture remained far better than that of a year earlier: the four-week moving average of first-time claims (231,000) was down 72.3 percent from mid-January. There were 2.129 million continuing claims made for unemployment insurance claims during the week ending January 1, down 87.4 percent from a year earlier.

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

  • Treasury International Capital Flows (November 2021, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +103.0 billion (vs. October 2021: -$46.5 billion; vs. November 2020: +$125.8 billion).  

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

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