Maybe Some Headwinds: April 18 – 22

Home sales wobble in the face of rising prices and interest rates. Here are the five things we learned from U.S. economic data released during the week ending April 22. 


Forward-looking measures signal slower than previously expected economic growth. The Conference Board’s Leading Economic Index (LEI) grew 0.3 percent in March to a reading of 119.8 (2016=100), down from a 0.6 percent bump during the prior month. The LEI has risen 1.9 percent over the past six months. Seven of ten LEI components made positive contributions, led by credit conditions, manufacturing hours worked, and business investment. The coincident index (CEI) increased 0.4 percent to 108.7, matching February’s gain and up 2.2 percent over the past six months. All four CEI components made positive contributions in March. The lagging index grew 0.6 percent during the month to a reading of 110.9, with five of six components making positive contributions. The lagging index has risen 2.0 percent over the past six months. The group now expects the U.S. economy will expand 3.0 percent in 2022, down a half percentage point from its prior forecast, the result of “effects of the war in Ukraine.”

Existing home sales slowed again in March. Sales of previously owned homes declined 2.7 percent during the month to a seasonally adjusted annualized rate (SAAR) of 5.77 million units. Not only were sales off 4.5 percent from a year earlier, the National Association of Realtors measure also was at its lowest point since the early part of the pandemic (June 2020). Sales fell in three of four Census regions, with steady activity in the West. All four regions had negative year-to-year comparables. A lack of homes for sale continued to weigh heavily on the market. While inventories expanded 11.8 percent in March to 950,000 units, the count of homes available for sale was off 9.5 percent from a year earlier and represented a mere 2.0 month supply. As a result, the median sales price of $375,300 was up 15.0 percent from a year earlier. The press release noted that “homes are selling rapidly” even in the face of increased interest rates and inflation.  

Housing held steady in March. The Census Bureau indicates housing starts inched up 0.3 percent during the month to a seasonally adjusted annualized rate (SAAR) of 1.793 million. Starts were 3.9 percent ahead of their year-ago pace. Single-family home starts dropped 1.7 percent, while those of multi-family units grew 7.5 percent. Looking towards the future, the annualized count of issued building permits increased 0.4 percent to 1.873 million (+6.7 percent versus March 2021). Issued permits for new single-family homes shrank 4.8 percent and those for multi-family homes swelled 10.9 percent. Housing completions slowed 4.5 percent to an annualized 1.303 million units (-13.0 percent versus March 2021).  

Homebuilder sentiment slipped in April. The National Association of Home Builders’ Housing Market Index lost two points during the month to a seasonally adjusted reading of 77. While the HMI has been above a reading every month since May 2020, the measure has shed seven points since December. The HMI fell in the West (84) and Midwest (63) but grew in the Northeast (74) and South (82). While the present conditions index lost two points to 85 (down five points since December), the expected sales measure added three points (but off 12 months since December). The prospective buyers traffic index shed six points to 60, its lowest mark since last August. The NAHB press release stated that the “housing market faces an inflection point” with soaring interest rates and home prices combined with rising construction costs. 

Layoff activity remained near multi-decade lows. The Department of Labor reports that there were a seasonally adjusted 184,000 first-time claims made for unemployment insurance benefits during the week ending April 16. This was off 2,000 from the prior week and 382,000 from a year earlier. The four-week moving average for initial job claims—177,250 was 70.9 percent below year-ago levels. There were 1.622 million continuing claims made for unemployment insurance benefits made during the week ending April 2. 

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

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

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