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Economic Update – February 28, 2011

posted Mar 2, 2011, 1:43 PM by Svetlana Raleigh

Last Week in the News

Existing home sales rose 2.7% in January to a seasonally adjusted annual rate of 5.36 million units from 5.28 million units in December. The inventory of unsold homes on the market declined 5.1% to 3.38 million, a 7.6-month supply at the current sales pace, down from an 8.2-month supply in December.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending February 18 rose 13.2%. Refinancing applications increased 17.8%. Purchase volume rose 5.1%.

The consumer confidence index rose to 70.4 in February from an upwardly revised 64.8 in January. It was the highest level since February 2008. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Standard & Poor’s/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — fell 1% in December after a 1% decrease in November. On a year-over-year basis, prices fell 2.4% compared with December 2009.

Initial claims for unemployment benefits fell by 22,000 to 391,000 for the week ending February 19. Continuing claims for the week ending February 12 fell by 145,000 to 3.79 million.

Orders for durable goods — items expected to last three or more years — rose 2.7% in January after a revised 0.4% decrease in December. Excluding volatile transportation-related goods, orders posted a monthly decrease of 3.6%.

New home sales fell 12.6% in January to a seasonally adjusted annual rate of 284,000 units from a revised rate of 325,000 units in December. Economists had expected a pace of 310,000 units.

Upcoming on the economic calendar are reports on construction spending on March 1 and factory orders on March 4.