Economic Snapshot: Pending home sales at highest level since June 2013

Pending home sales and consumer confidence are both up this month, with pending home sales building significant year-over-year growth.

Pending home sales

The Pending Home Sales Index rose 3.1 percent to 106.9 in February, up from January’s slight downward revision to 103.7 and is 12.0 percent above February 2014. The index is now at its highest level since June 2013.

Pending home sales have reached six consecutive months of year-over-year gains and the index is above 100 for the 10th consecutive month, which is considered an average level of activity.

The percentage of first-time buyers increased slightly for the first time since November 2014, up to 29 percent from 28 percent in January.

Pending home sales fell 2.3 percent to 81.7 in the Northeast but is 4.1 percent above the previous year. In the Midwest, the index climbed 11.6 percent to 110.4 and is now 13.8 percent above February 2014.

Pending home sales in the South decreased 1.4 percent to 120.2 in February but is still 10.8 percent above the previous year. The index in the West rose 6.6 percent to 102.1 and is now 18.3 percent above February 2014.

Consumer confidence

The Consumer Confidence Index reached 101.3 in March, up from 98.8 in February. Last year, the index was at 83.9 in March 2014. The Expectations Index rose sharply to 96.0 in March from 90.0 in February. However, the Present Situation index decreased to 109.1 from 112.1.

The percentage of consumers who say business conditions are “good” was unchanged at 26.7 percent and those claiming conditions are “bad” increased to 19.4 from 16.7 percent the previous month. The percentage of consumers saying jobs are “plentiful” increased to 20.6 from 20.3 percent and those saying jobs are “hard to get” also increased to 25.4 from 25.1 percent.

The percentage of consumers expecting business conditions to improve over the next six months decreased to 16.7 from 17.6 percent but those expecting business conditions to worsen also decreased to 8.0 from 8.9 percent. Consumers who are anticipating more jobs in the months ahead increased to 15.5 from 13.8 percent and those anticipating fewer jobs declined to 13.5 from 14.8 percent. The proportion of consumers expecting growth in their incomes improved to 18.4 from 16.4 percent and those expecting a drop declined to 9.9 from 10.8 percent.

ADP employment report

Private sector employment added 189,000 jobs from February to March. This is the first month of job increases under 200,000 since January 2014 and significantly below the forecast of 225,000 jobs.

Small businesses made the largest contribution to employment this month with 108,000 new jobs, up from 103,000 in February. Medium businesses added 62,000 jobs in March, up from 57,000 in February, and large businesses added 19,000, a sharp decrease from 53,000 the previous month.

Good-producing employment added 5,000 jobs, down from 22,000 jobs in February. The construction industry added 17,000 jobs, down from 28,000 last month. Manufacturing lost 1,000 jobs after adding 2,000 the previous month.

Service-providing employment added 184,000 jobs in March, down from 192,000 last month. Professional/business services contributed 40,000 jobs in March, and increase from 34,000 in February. Trade/transportation/utilities added 25,000 jobs this month, down from 32,000 the previous month. Financial activities added 16,000 jobs, down from 19,000 jobs in February.