Every week the Research staff analyzes key data releases and explain what they mean for you and your business. In this update, we give the highlights of the most important data releases for the week of May 23-May 27, 2011, along with graphs that show the latest movement and overall trends.
Highlights for Monday, May 23, 2011
- The average annual inflation expectation in the U.S. over the next ten years declined by 9 bps to 2.30%
- The decline in inflation expectations and continued low long term interest rates may suggest expectations of slower economic growth. It may also suggest a preference for less risk assets.
Highlights for Tuesday, May 24, 2011
- Inventories are at historic lows, limiting the volume of homes that can be sold.
- As a share of total single family sales, new homes fell to just 6.8% in April. Historically, that figure has hovered around 15% to 20%. New home sales reflect weakness in the housing construction sector, which has hurt employment growth, but has enabled the housing market to focus on the overhang of inventory from short-sales and foreclosures.
Highlights for Wednesday, May 25, 2011:
- The Purchase index advanced 1.5 from the previous week, and was 3.1 percent higher compared with a year ago.
- New orders for manufactured durable goods declined 3.6 percent in April, to $189.9 billion. The figure represents a second decline in the last three months.
Highlights for Thursday, May 26, 2011:
- The total level is now at 424,000 which is above the critical 400,000 level needed for improvement in the job market. Even when looking at the states that had the largest increases, no evident pattern that emerges.
- Fewer layoffs came largely from the service and automobile industries. If jobless claims stay up as they have in the past week and do not trend down, NAR expects less than 1.5 million net new jobs in the next 12 months, which would barely lower the unemployment rate.
Friday, May 27, 2011:
- However, real disposable personal income, after adjusting for higher consumer prices, has been essentially unchanged the last two months because of increases in prices. The year over year growth in this figure in April was about half of its 10-year average compared to being near or above average in the first three months of the year.
- Personal saving held steady at 4.9 percent. This savings rate is below the 6 percent rate of a year ago and well below the 8.2 percent peak reached in the aftermath of the economic crisis. This rate is within the 1990s range and above the 1 to 4 percent savings rate that predominated in the 2000s.
- Data from the Michigan Survey of Consumer Sentiment suggests that most consumers believe that high and rising prices are here to stay but that rapid price increases have passed. The Index of Consumer Sentiment in April was higher than in March but below the April 2010 reading. The current conditions index suggests that while there was no change in the month, conditions are better than one year ago. The big movement is in the expectations index. Expectations have improved over March but are much lower than one year ago as consumers seem to now anticipate a drawn out return to recovery and less economic security.