What To Watch For This Week
Recently I read about a few things scheduled this upcoming week that are critical measures of overall economy. The spotlight is on the housing market, jobs and the GDP reading on economic conditions at large.
Existing Home Sales on Tuesday
Existing Home Sales plunged in July as the full effect of the expiration of the home buyers’ tax credit at the end of April was felt. Because home re-sales are counted when the sales contract closes, these data represents sales made primarily in May and June, after the tax credit expired. Home re-sales are now trying to find an equilibrium level supported only by the underlying fundamental factors.
New Home Sales on Wednesday
New Home Sales inched higher in July, continuing their recovery after the sharp plunge that occurred in May after the expiration of the home buyers’ tax credit at the end of April. Sales of new homes are counted when contracts are signed; between February and April, new home sales leapt by 49.1% as home buyers took advantage of the tax credit. New home sales now are trying to find an equilibrium level supported only by the underlying fundamental factors.
Jobless Claims / Continuing Claims on Thursday
The job situation has been a continued disappointment and showing little signs of improvement. The situation continues to ravage many of our industrial centers where the unemployment rate is considerable higher than the national average of near 9.5%. An underlining concern is the Underemployed rate. This is a measure of those who have taken jobs below their qualified and customary level of work skills and pay, this number approached 18.4% and 28.4% among those aged 18 to 29. Overall underemployment peaked at 20.4% in April.
Gross Domestic Product on Friday
GDP was revised much lower on this second estimate of economic growth for 2010 Q2. Recent data releases and revisions suggest slightly less construction spending, moderately less inventory investment (primarily at the manufacturing level), weaker consumer spending, and even more deterioration in the trade balance (with fewer exports and more imports). Not only was Q2 much weaker than previously estimated, it ended very softly. This suggests little momentum going into Q3 and the possibility of more subpar growth in the current quarter. The GDP Price Index was not affected by this revision.
Bottom Line: While no surprises are expected the revised numbers for previous indicators are coming in lower, causing increased concerned.
And thank you for making me Your Orange County Real Estate Connection.
Michael Caruso, Broker ABR ABRM CRB CRS GREEN GRI
2007 President, Orange County Association of Realtors (949) 753-7900