This week, housing market data signaled a “powerful recovery” in February, manufacturing in the Northeast rebounded and the labor market remained strong.
The National Association of Realtors (NAR) said Friday existing home sales soared 11.8% to a seasonally adjusted annual rate of 5.51 million, the largest single monthly gain since December 2015.
The consensus forecast was calling for 5.1 million, with forecasts ranging from 4.990 million to 5.470 million. Chief Economist Lawrence Yun called it “a powerful recovery” after months of relatively flat sales.
“A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound,” Mr Yun said.
Mr. Yun said the housing market in 2019 needs additional new housing in order to sustain growth. The Housing Market Index (HMI) on Monday found builder confidence held firm in March after it soared in February. Homebuilders have big expectations for the Spring after the impact of rising wages puts upward pressure on demand for inventory.
Wages rose by 3% in the fourth quarter (Q4) 2018 for the first time since 2009, and have risen by 3% or more for 7 consecutive months. The 3.4% year-over-year wage gain in the February Employment Situation report was the largest since April 2009.
The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey nearly tripled the forecast, rising from -4.1 in February to 13.7 in March. The consensus forecast was 5.5, with forecasts ranging from a low of -2 to a high of 15.
It was the only regional factory report to show contraction last month, and was all the buzz on Wall Street when it was released. The reading was welcomed news and followed an unexpected gain in U.S. factory orders reported Monday, which rose by $500.5 billion in January, or 0.1%.
The consensus forecast was looking for a flat zero, with forecasts ranging from a low of -3.0% to a high of 0.6%. New orders for manufactured goods in the U.S. have now risen for two straight months.
Whole trade did show a larger than expected build in inventories that outpaced sales, a sign of slower growth, though a trend one month does not make.
The labor market also remained strong this week, as the first weekly jobless claims report containing the period covering the upcoming jobs report beat expectations.
The Labor Department said advance seasonally adjusted jobless claims came in at 221,000 for the week ending March 16. That was stronger than the consensus forecast and a decline of 9,000 from the previous week.
The consensus forecast was 225,000, with forecasts ranging from a low of 212,000 to a high of 243,000. The advance seasonally adjusted insured unemployment rate was unchanged at a very low 1.2% for the week ending March 9.
The Baker Hughes North America Rig Count fell by 66 rigs for the week ending March 22, as Canada continues to drag down the United States (US).
The U.S. rig count declined by 10 to 1016, but remains 21 rigs above the previous year. The rig count for Canada declined by 56 to 105, and remains 56 rigs below the previous year.