Just as many economists and business prognosticators thought the economy would really start heating up, a raft of economic indicators continues to suggest we’ll be stuck on hold a while longer.
As the winter of 2013-14 fades from memory and ceases impacting economic indicators, the strong growth many thought was set to begin remains holed up in the dugout. This week’s updates from Wall Street, the Chicago Fed, Bureau of Labor Statistics and the National Association of Realtors suggests that slow and steady remains the watchword of the American economy.
National Activity Index
From the Chicago Fed comes a fresh report showing that the nation’s economic growth moderated in April, led primarily by declines in production-related indicators. Even so, the index’s three-month moving average increased to +0.19 in April from +0.04 in March, meaning that growth in national economic activity outpaced the historical trend. The index focuses on four categories of data including production and income, employment and unemployment, personal consumption and housing, and sales, orders and inventories.
Zooming out back to 2000, the Chicago Fed’s National Activity Index increased drastically throughout 2009 and 2010, remaining largely at trend or slightly above in the subsequent years.
Existing Home Sales
The latest NAR report shows that existing-home sales in April rose 1.3 percent to a seasonally adjusted annual rate of 4.65 million — up from 4.59 million in April. This is 6.8 percent below the 4.99 million-unit level seen in April 2013.
Also included in the report, total housing inventory at the end of April jumped 16.8 percent to 2.29 million existing homes for sale. This is a 5.9-month supply at the current pace, up from 5.1 months in March. These numbers are slightly below expectations of sales at 4.67 million.
For the week ending May 17, seasonally adjusted initial unemployment claims rose 28,000 higher than the previous week to 326,000. The previous week’s level was revised upward by 1,000 to 298,000. This puts the 4-week moving average at 322,500 — still within the range we’ve seen in recent months.
While we’re still sitting at pre-recession levels of weekly unemployment claims, the job situation has failed to move in a sustained, significant way. Until we start creating more jobs, expect the recovery to keep grinding along at a snail’s pace.