Friday Economic Snapshot
Good Friday, and welcome to the second installment of the Boating Industry Friday Economic Snapshot. For the week of May 24, 2013, we’ve seen the release of several important economic indicators including U.S. unemployment claims, new home sales and Chinese manufacturing.
Overall, the United States is looking surprisingly rosy — especially given ongoing cuts in government spending — with another marked decline in unemployment claims and continued buoyancy of new home sales, the all-important indicator for overall economic growth. Thinking globally, China’s economy seems to be slowing down, which doesn’t bode well for all major economies going forward.
Unemployment Claims Decline
If anybody thought the last unemployment figures were a positive fluke, things are looking even better today. For the week ending May 18, seasonally adjusted initial unemployment claims came in at 340,000, which represents a decrease of 23,000 from the previous week’s revised figure of 363,000. The four-week moving average was 339,500, a decrease of 500 from the previous week’s revised average of 340,000.
States reported 1,776,686 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending May 4, a decrease of 15,415 from the prior week. There were 2,630,544 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first-, second-, third-, and fourth-tier activity.
New Home Sales
American home sales have reached a high-water mark not seen in more than three years. As reported by the Census Bureau, sales of new single-family houses in April 2013 rose to a seasonally adjusted annual rate of 454,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.3 percent above the revised March rate of 444,000 and a whopping 29 percent better than April 2012.
The median sales price of new houses sold in April 2013 was $271,600, while the average price was $330,800. With an estimated 156,000 new houses for sale at the end of April, this represents a supply of 4.1 months at the current sales rate.
According to data released by HSBC Holdings Plc and Market Economics, China’s manufacturing contracted, adding to fears that the world’s second largest economy may be hitting the skids — and that its days of consecutive, double-digit annual GDP growth may be a thing of the past.
If that’s the case, it’s a sign that China’s economy may be shifting away from a low-cost manufacturing haven to a more services- and innovation-based economy, which has long been predicted by many economists.
From the report: “The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds” — Qu Hongbin, chief economist for Greater China, HSBC.
America is looking stronger by the month, blowing past fears of a late-spring\early-summer slowdown, which has been a recurring speed bump during the economic recovery. China, while still growing at a strong pace, may not have the might to pull Europe out of its continued slump.