MARKET WATCH: FEBRUARY 24, 2020

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Last Week’s Economic News

• The first quarter of the year should be a good one in the new home market, according to the latest information on housing starts. Building permits jumped 9.2% in January and are up 17.9% above the January 2019 rate. Building permits issued for single-family homes rose 6.4% in January. Housing starts fell 3.6% in January but are 21.4% above the January 2019 rate. Housing completions also dropped 3.3% last month and single-family housing completions in January fell 3.5%.

• Following a strong December, sales of existing homes fell 1.3% in January. However, year-over-year, existing home sales are up 9.6%. Single-family existing home sales dropped 1.2% in January from December’s total. The median existing-home price in January was $266,300 ($274,500 in December), up 6.8% from January 2019 ($249,400). The median existing single-family home price was $268,600 in January 2020 ($276,900 in December), up 6.9% from January 2019. Total inventory rose 2.2% in January from the prior month.

• Prices for producers advanced 0.5% in January after climbing 0.2% in December. Producer prices are up 2.1% for the 12 months ended in January, the largest advance since moving up 2.1% for the 12 months ended May 2019. In January, 90.0% of the increase in the Producer Price Index is attributable to prices for final demand services, which climbed 0.7%. The index for final demand goods inched up 0.1%. Producer prices less foods, energy, and trade services advanced 0.4% in January, the largest increase since a 0.4% rise in April 2019. For the 12 months ended in January, the index for final demand less foods, energy, and trade services moved up 1.5%.

• For the week ended February 15, there were 210,000 claims for unemployment insurance, an increase of 4,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended February 8. The advance number of those receiving unemployment insurance benefits during the week ended February 8 was 1,726,000, an increase of 25,000 from the prior week’s level, which was revised up by 3,000.

Eye on the Week Ahead

A busy week is ahead for important economic and market-moving reports. January’s figures on new home sales are available early in the week. December saw sales of new, single-family homes dip below November’s totals. Also out this week are reports on durable goods orders and the gross domestic product. December’s new orders for durable goods rebounded following a poor November. The fourth-quarter GDP increased 2.1%, according to the advance estimate. January’s figures will be based on more economic data, but are expected to reveal a comparable growth rate for the economy during the last quarter of 2019.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

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