Real estate enjoyed a modest rebound in January. Here are the five things we learned from U.S. economic data released during the week ending February 23.
A slight gain in home sales in January. The National Association of Realtors reports existing home sales grew 3.1 percent to a seasonally adjusted annualized rate (SAAR) of 4.000 million. Sales remained 1.7 percent below that of a year earlier. Sales grew in three Census regions, with steady activity in the Northeast. Inventories were tight even after improving 2.0 percent to 1.010 million units, the equivalent to a 3.0 month supply. The median sales price of $379,000 was up 5.1 percent from a year earlier. The press release noted that “listings were modestly higher” and mortgage interest rates were lower.
Economic growth slowed in January. The Chicago Fed National Activity Index (CFNAI) lost 32 basis points to -0.30. An index reading between zero and -0.70 reflects a U.S. economy growing slower than at its historical pace. Only 26 of the CFNAI’s 85 components made positive contributions to the index, with the other 59 weighing on the measure. Among the four major categories of index components, three (production, sales/orders/inventories, and personal consumption/housing) made negative contributions to the CFNAI. Employment measures had a neutral contribution. The CFNAI’s three-month moving average of -0.02 was a 12-basis point improvement from December.
Forward-looking economic measures continued to underplay economic activity in January. The Conference Board’s Leading Economic Index (LEI) dropped 0.4 percent to 102.7 (2016=100). The measure has declined 3.0 percent over the past six months. Three of ten LEI components made positive contributions led by stock prices. The Coincident Economic Index (CEI) grew 0.2 percent to 112.1, leaving the measure up 1.0 percent over the past six months. Three of four CEI measures made positive contributions (industrial production being the negative outlier). The Lagging Economic Index added 0.4 percent to 118.6 (+0.9 percent over the past six months). After many months of saying otherwise, the Conference Board no longer is forecasting a recession.
Jobless claims have remained low in February. The Department of Labor estimates that there were a seasonally adjusted 201,000 first-time claims made for unemployment insurance benefits during the week ending February 17. Claims were down 12,000 for the week and 16,000 from a year earlier. The four-week moving average for initial jobless claims of 215,250 was up 1.1 percent from the same week a year earlier. There were 2.171 million continuing unemployment insurance claims made during the week ending February 3 (not seasonally adjusted), up 9.7 percent from a year earlier.
Service sector sales rose as 2023 ended. The Census Bureau estimates “selected” services revenue totaled a seasonally adjusted $5.401 trillion during the fourth quarter of 2023, up 2.0 percent from Q4 and 6.6 percent from a year earlier. Without seasonal adjustments, sales jumped 3.8 percent for the quarter, with gains in information, transportation/warehousing, finance/insurance, real estate, professional/scientific/technical services, and health care/social assistance. Sales fell with arts/entertainment/recreation, education, administration, and utilities.
Other U.S. economic data released over the past week:
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What We Learned About the U.S. Economy Last Week 