This Week's Economic Roundup
While consumer mood continues to sour, positive signs in the nation's housing and labor markets, among other areas, may be pointing to better times ahead. Here's a look at this week's economic developments and how they may impact your business.
Leading Index Picks Up
Despite sagging consumer expectations, the index of leading economic indicators rose by 0.3 percent in December, the Conference Board reported on Tuesday.
Driven by an improved outlook on the labor and housing markets, the index stands at 138, compared to its 1996 baseline reading of 100.
Six of 10 components of the New York-based private research group's monthly index improved last month, including building permits, jobless claims, real money supply, stock prices, vendor performance, and new manufacturers' orders.
The index, which gauges the near-term strength of the economy, has stayed flat over the past few months. The November reading was revised downward from a 0.1 percent gain to zero, the report said. Last month's gains were still 0.4 percent below January 2006, the gauge's most recent high point.
The group's coincident index, which measures current conditions, also rose in December, by 0.2 percent, led by gains in employee payrolls, industrial production, personal income, and manufacturing and trade sales, the report said.
Existing Home Sales Down
Currently, however, the housing market continues to struggle, with sales of existing homes dropping 0.8 percent in December to an annual rate of 6.22 million -- 7.9 percent below the same period last year, the National Association of Realtors reported Thursday.
For the year, total sales of single-family homes, townhouses, condos, and co-ops dropped to 6.48 million, a decrease of 8.4 percent from 2005 that left 3.51 million existing homes on the market at the end of December, the report said.
Last month's declines were led by a 1.3 percent drop in single-family home sales, the report said.
Yet despite weaker sales, national median prices for all housing types rose 1.1 percent last year to $222,000, compared to $219,600 in 2005, the report said.
"Despite all the doom-and-gloom stories and dire predictions over the last year, 2006 was the third-strongest year on record for existing-home sales," David Lereah, the group's chief economist, said in a statement.
Lereah said the housing market already appears to be moving beyond last year's low cycle, while buyers are being encouraged by low interest rates and more competitive pricing.
Chain-Store Sales Rising
Fierce winter storms didn't keep shoppers away from the nation's chain stores last week, where weekly sales rose by 0.1 percent over the previous week, the International Council of Shopping Centers said Tuesday.
Compared to the same week last year, sales rose by 4.8 percent, the New York-based trade group said.
"Sales inched up over the latest week, but were hurt by soft customer traffic due to some regional weakness as more than half of the U.S. was snow covered," Michael Niemira, the group's chief economist, said in a statement.
Despite flatter sales over the past two weeks, Niemira said he still expects total January sales to increase by 3 percent over last year.
Jobless Claims Up
New claims for unemployment benefits rose by 36,000 to 325,000 in the week ending Jan. 20, the Labor Department reported Thursday.
A total of 2.484 million unemployment claims were file the previous week, leaving the national insured unemployment rate unchanged at 1.9 percent, the report said.
The biggest gains in new claims last week were in California, Michigan, and Texas, the report said.