Economic Snapshot: Small dips in consumer confidence, pending home sales

While consumer confidence and pending home sales both declined this month, both indexes continue to increase year-over-year. The GDP was also revised up from its earlier estimates, which exceeded economists’ expectations.

Consumer confidence

Consumer confidence dropped to 88.7 in November, down from 94.1 in October. This is the lowest level of optimism since June but it still much higher than the 70.4 reading in November 2013.

The jobs-hard-to-get reading was little changed this month, at 29.2 percent, and is historically low for the reading. The present situation reading, of which the jobs-hard-to-get reading is a subcomponent, fell 3.1 points to 91.3. Economists say this could indicate month-to-month weakness in consumer activity.

The expectations index fell 6.8 points to 87.0, which reflects declining confidence in future business conditions and the jobs outlook. However, a subcomponent of expectations – future income – held nearly steady this month.

Pending home sales

Pending home sales dropped 1.1 percent in October to 104.1 but remain 2.2 percent higher than they were in October 2013 at 101.9. This marks the sixth month of pending home sales index readings above 100, which is considered an average level of contract activity.

The median price for existing homes for all housing types was $208,300 in October, 5.5 percent higher than the previous year, and the monthly median price growth has averaged 5.8 percent in 2014.

This month’s index was contributed to by sales declines in the Midwest, down 0.6 percent to 100.6 and 3.0 percent below last year. Sales also decreased 1.0 percent in the South to 118.3 and 3.2 percent in the West to 98.1, but remain 3.9 and 4.1 percent above October 2013 sales in their respective regions. Sales in the Northeast increased 0.5 percent to 87.9 and are 3.4 percent above last year.

GDP

GDP was unexpectedly revised up instead of down for the third quarter. GDP growth increased at an annual rate of 3.9 percent, according to the second estimate, up from the original estimate of 3.5 percent.

The price index for gross domestic purchases increased 1.4 percent. Excluding food and energy prices, the index increased 1.6 percent. Real final sales of domestic product increased 4.1 percent, compared to an increased of 3.2 percent in the second quarter. This index is based on GDP less change in private inventories.

New home sales

New home sales rose 0.7 percent in October to an annualized pace of 458,000, up from 455,000 in September and 450,000 in October 2013.

The median sales price of new homes was $305,000 and the average sales price was $401,000. The seasonally adjusted estimate of new homes for sale last month was 212,000, which indicates a 5.6-month supply at the current sales rate.

Sales surged in both the Northeast and Midwest regions, growing 7.1 percent and 15.8 percent, respectively. Sales declined in the South and the West.