May 30, 2013

GDP, Jobs, and Home Sales Sluggish

May 30, 2013

GDP, Jobs, and Home Sales Sluggish

1stQ2013 GDP 1st revision

– Real GDP Quarter/Quarter 2.4%. Initial was +2.5%

– GDP price index Quarter/Quarter (Seasonally Adjusted Annualized)  +1.1%. Previous was +1.2%.

– Final Sales of Domestic Products +1.9%.  Previous was +1.5%.

GDP growth is still too low.  The goal should be 3.5%-4.0% growth. Of concern should be the debt/GDP ratio which continues to increase.

Real per capita disposable income was revised lower yet again. In fact, real per capita disposable income contracted during the quarter at an astonishing -9.03% annualized rate, taking it to a level below where it was two years ago. And the personal savings rate was adjusted down once more — this time to 2.3%.

Initial Jobless Claims (week ended 5/25/2013)

– New Claims (seasonally adjusted) 354,000. Previous was 340,000

– 4-week Moving Average 347,250. Previous was 340,250

– New Claims (unadjusted) were 317,732, an increase of 13,653 from the previous week.

I do not see any significance to the slight increase in initial claims. 350,000 Initial Claims is a level indicating, more or less, a jobs market getting neither better or worse.

Pending Home Sales (April 2013)

– Pending Home Sales Index 106.0. Previous was 105.7.  This data comes from NAR and should be a leading indicator of existing home sales.  A Pending Home Sale exists when there is a ratified contract but the sales has not yet closed.

One topic worth think about is that there have been two different sources of sales – distressed (foreclosures and short sales) and non-distressed.  As the supply of distressed sales has decreased we have seen an increase in median price as the poorer quality homes – likely to sell at lower prices – have diminished in number and, as that supply decreases, we are also seeing a flattening in sales.