Economic data remains choppy, showing signs of a qualitative shift in the U.S. economy. Main-Street-level indicators are showing improvement — housing, auto sales, unemployment insurance claims, gasoline prices. But higher-level macro-economic indicators are showing some strain. So we can see a broad current of endogenous growth for the U.S. that is getting some push back from global headwinds and also from self-imposed headwinds from the “Fiscal Cliff,” scheduled to hit in early 2013. Existing home sales increased by 3.4 percent in April to a 4.62 million unit rate, just below January’s recent weather-aided high of 4.63 million units annualized. New home sales gained 3.3 percent in April to a 343,000 unit pace; still weak, but improving off the dead-in-the-water rate of 280,000 from the summer of 2010. New orders for durable goods gained just 0.2 percent in April after falling by 3.7 percent in March. Weak orders may be a sign that the manufacturing sector has lost a step over the last month. Initial claims for unemployment insurance for the week ending May 19 were essentially unchanged at 370,000. Claims have fallen after the Easter bulge, but the rate of decline has obviously slowed from late 2011/early 2012. Nonetheless, a level of 370,000 initial claims weekly is consistent with ongoing improvement in labor market conditions. The Chicago Federal Reserve Bank’s National Activity Index for April increased by 0.11, after falling in March. A positive reading means above average growth. Consumer confidence increased in May according to the University of Michigan survey, which ticked up to 79.3 as gasoline prices fell. After flat-lining during the economic “recovery,” consumer confidence is on the way up.
Click here for the complete Comerica Economic Weekly for May 25, 2012: CMAEconWeekly052512.