Economy Watch: Existing Home Sales Rise; Commodities Spike in Wake of Fed Decision; Unemployment Claims Up
- Sep 20, 2013
The National Association of Realtors reported on Thursday that total existing home sales nationwide rose 1.7 percent to an annualized rate of 5.48 million units in August, compared with 5.39 million in July. Compared with a year ago, existing home sales are 13.2 percent higher. In fact, sales are at the highest pace since the pre-recessionary month of February 2007, when they hit 5.79 million.
Housing inventories barely budged during August. Total housing inventory at the end of August increased 0.4 percent to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, according to NAR. By that metric, housing inventories are slowly slipping. There was five-month supply in July, and a six-month supply a year ago.
Some markets saw inventories shrink a lot faster than others. NAR data found that the largest declines in inventory from a year ago were in Naples, Fla., down 23.5 percent; the Detroit area, down 23.3 percent; and the greater Boston area, down 20.7 percent.
Commodities Spike in Wake of Fed Decision
The aftermath of the Fed’s decision not to taper continued on Thursday, after roiling international markets on Wednesday. The impact was especially apparent in the price of commodities, which were generally up. When the U.S. economy is perceived as weak, investors tend to turn to commodities, and the Fed’s announcement was an admission that it doesn’t believe that the economy can stand on its own feet just yet.
The price of oil, for instance, rose immediately after the Fed’s announcement, with West Texas intermediate surging past $108 a barrel from about $105, and Brent was nearly $111 a barrel (both are benchmark rates). The price of gold was also up sharply on Wednesday, rising 4.6 percent to more than $1,367 per troy ounce, and edging up a bit more on Thursday, about 0.3 percent.
The price of gasoline in the U.S. may or may not be affected by the hubbub. So far, it’s remained stable in recent days, averaging $3.494 per gallon of regular on Thursday, according to AAA. If fact, that’s down from a month ago ($3.533) and considerably down from this time last year ($3.846).
Unemployment Claims Edge Up
For the week ending Sept. 14, the number of unemployment claims was 309,000, an increase of 15,000 from the previous week’s revised figure of 294,000, the U.S. Department of Labor reported on Thursday. The less-jumpy four-week moving average was 314,750, a decrease of 7,000 from the previous week’s average, and the lowest since Oct. 2007.
Wall Street ended Thursday mixed, but mostly down, with investors presumably now more worried about the state of the economy than elated about the continued stimulus. The Dow Jones Industrial Average lost 40.39 points, or 0.26 percent. The S&P 500 was off 0.18 percent, but the Nasdaq gained 0.15 percent.