From the Desk of Robert Dye

Things Are (not so) Great

Even before The Great Recession, things were getting really great. Economists had already coined the term “The Great Moderation” to describe the recent tendency of U.S. business cycles toward longer expansions. This is clearly evident in a graph of year-over-year real GDP growth since 1945. After the back-to-back recessions of the early 1980s expansions got longer. John Taylor wrote about The Great Deviation, using that term to describe the recent period when, according to him, monetary policy became more interventionist, less rules-based and less predictable. That coincided with The Great Disinflation, when year-over-year changes in inflation indexes began increasing at a slower rate after the energy crises of the 1970s and early 1980s. Now low inflation seems to be part of The Great Malaise, according to Joseph Stiglitz. Low inflation is also part of The Great Stagnation story. Tyler Cowen used that term to talk about the slowdown in technology driven productivity growth. This appears to be contemporaneous with The Great Decoupling of resource use and economic growth. Economists are trying to find terms that are useful in describing an economy that just feels different from what we all think it should feel like. But maybe we should turn the tendency to label recent conditions as “Great” on its head. Maybe things are just getting normal in the U.S. after some very abnormal decades. The events of World War II and its aftermath were truly great, with unprecedented scope and scale. World War II established many of the conditions that led to the energy crisis, which was also great in terms of scope and scale. The scope and scale of the Great Recession also justifies the adjective. China had its Great Leap Forward, but that contributed to The Great Chinese Famine. Maybe we can make a mashup of Thomas Picketty and Robert Gordon and say that things are not so great right now, but that is ok. We are in The Great Ok.

 

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From the Desk of Robert Dye

Negative Interest Rates

We had a timely question from a client today about negative interest rates. I hope that my answer may be beneficial for others as well.

Q – Do you think the Fed will ever implement negative interest rates?

A – The fact that five central banks throughout the world are currently experimenting with negative interest rates tells us that the probability of the Federal Reserve experimenting with negative interest rates is above zero. Given the fact that we are currently still close to a zero fed funds rate, if we encountered a clear and persistent trend toward deteriorating U.S. economic indicators, then the odds of the Fed deploying a negative interest rate strategy would go up. However, there are some important obstacles to this strategy. One key obstacle is the U.S. Congress. In her recent biannual House and Senate committee testimony, FOMC Chair Janet Yellen endured pointed questions about the legality of a negative interest rate strategy.

For now, let’s assume that the Fed has the following choices if it was facing a near term recession: (1) leave rates steady, (2) lower rates close to zero or (3) lower rates to negative. Let’s give #1 a 25 percent probability, #2 a 50 percent probability, and #3 a 25 percent probability. So, if we think that there is a 20 percent chance that economic conditions significantly deteriorate this year, and that there is a 25 percent chance that the Fed would use a negative interest rate strategy under those conditions, then we can say that there is a 0.20 x 0.25 = 0.05, or five percent, chance that we could see negative rates this year.

Going forward, I think that the long-term answer to the question will depend on the experiences of the European Central Bank, The Swiss National Bank, The Bank of Sweden, The Denmark National Bank, and The Bank of Japan. According to former Federal Reserve Governor Kevin Warsh, the ultimate goal of negative rates in the current environment is to weaken currency. The cost of negative rates would be doubling down on the already well known distortive effects of near zero rates, and then adding some more unintended consequences.

The final point I would like to make on negative interest rate policy is that it is a highly nuanced, highly targeted policy, not a one-size-fits-all policy. So the impacts of such a policy in the U.S. would depend highly on the details. I think that the Fed would be very reluctant to discuss any details of a negative interest rate policy until it has thoroughly vetted it with Congressional leaders.

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March 2016, Comerica U.S. Economic Update

The quality of U.S. economic data has shifted in recent weeks from being generally a little worse than expected to being generally a little better than expected. The February payroll data showed a strong 242,000 jobs added to the U.S. economy and the continuation of a 4.9 percent unemployment rate. Global financial markets have stabilized after a choppy start to the year. Oil prices have firmed to about $37 per barrel for West Texas Intermediate crude. Inflation data was a little warmer than expected in January. We have started to dial back our probability of near-term recession for the U.S. from an uncomfortable high of about 33 percent a month ago to about 25 percent in early March. If the recent data pattern continues, we will dial it back further next month. Given the Federal Reserve’s professed data dependent policy for judging the appropriateness of further interest rate hikes, one would think that a rate hike this spring would be back on the Fed’s table. The fed funds futures market doesn’t think so. According to the CME Group’s Fedwatch tool, which translates bets on fed funds futures into implied probabilities, the odds of a fed funds rate hike at the upcoming March 15/16 FOMC meeting are a very low four percent. We agree. We expect the Fed to make no changes to its benchmark short term interest rates next week. But we are hopeful that we will get some meaningful forward guidance from the Fed that focuses financial market expectations in a reasonable direction. Right now fed watchers are adrift, waiting to see which way the prevailing winds will blow. Expectations for four interest rate hikes this year were shredded by low oil prices and unsteady China. A scenario of zero rate hikes this year is inconsistent with warmer inflation data, a sub-5 percent unemployment rate and the need to mitigate ongoing financial market distortion from low interest rates. We are hopeful that forward guidance from the Fed, issued on March 16, will start to illuminate the way forward, with one, two, or three 25 basis point rate increases this year. In our March interest rate forecast, we have incorporated two rate hikes for 2016, one in June and the other in December.

We believe that two rate hikes this year, to put the fed funds rate near 0.88 percent at the end of the year, would position the Fed appropriately for its upcoming battle against inflation. Inflation will be stoked by rising wages, rising commodity prices and tight housing markets. While overall wage growth was subdued in February due to the changing mix of jobs in the U.S. economy, wages by occupation are heading up. High demand occupations, including construction workers and healthcare workers, are leading the way. We expect oil prices to be higher at year-end than they are today. Even stable oil prices will allow inflation indicators to warm up over the course of the year. Housing will also be a key driver of inflation this year. Most major housing markets are undersupplied and will support ongoing price growth even with a modest increase in mortgage interest rates this year. Rental markets are tight too, driving up readings on housing-related inflation.

Strong job growth and improving house prices are supporting consumer spending. Nominal consumer spending was up 0.5 percent in January. Auto sales remained firm at a 17.5 million unit sales rate in February. In December, sales at full-service restaurants were up 8.8 percent from a year ago.

For a PDF version of the complete Comerica U.S. Monthly with additional commentary, tables, and charts, click here: USEconomicUpdate – 03_2016.

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Comerica Economic Weekly

It feels like U.S. economic data is changing from a little worse than expected since the start of the year, to a little better than expected as we finish up the first quarter. We reflect this in our lower odds of recession for this year, still elevated above the minimum 10-15 percent, but easing now to about 20-25 percent. Stable oil prices and a stable stock market will help us feel more confident in the U.S. economy through the year.

We are holding to our thesis of ongoing moderate gains in consumer spending this year buffering the impact of global volatility. Supports for consumer spending are strong job growth, reasonable wage gains, good house price appreciation, solid stock market performance, improving consumer confidence, easing credit availability, good credit quality and low energy prices. Most of those supports are in place now.

Above all other supports for consumer spending is strong job growth, and that is what we have. The BLS employment report for February showed a strong net gain of 242,000 payroll jobs for the month. The unemployment rate was unchanged at 4.9 percent and average hourly earnings ticked down by a tenth of a percent.

Today’s jobs data is positive for the economy, but it does not materially lift the low odds of a March 16 fed funds rate hike by the Federal Reserve, especially considering the drop in average hourly earnings which will be viewed as a temporary easing of inflationary pressure. The drop in earnings does not indicate a softer economy. It likely stems from a shift in the mix of jobs, with fewer high-paying energy and manufacturing jobs and more lower-paying service jobs.

We expect the unemployment rate to continue to drop through the course of this year, at a slower pace than last year, keeping upward pressure on wages by occupation.

Initial claims for unemployment insurance for the week ending February 27 gained 6,000 to reach 278,000, still a good number. Continuing claims for the week ending February 20 gained 3,000 to hit 2,257,000, also still a very good number.

Wage pressure from tighter labor market conditions, ongoing house price appreciation and rent increases plus stabilization in commodity prices is the recipe for future Federal Reserve interest rate hikes. That is still a believable scenario for the second half of this year. For now, we are expecting two 25 basis point increases in the fed funds rate this year. Hopefully, we will get some meaningful forward guidance from the Federal Reserve on March 16 to fill in the current guidance vacuum.

The U.S. international trade gap widened in January to -$45.7 billion. The strong dollar remains a headwind for exports, which dropped by $3.8 billion in January. Imports dropped by a smaller $2.9 billion for the month. The January real trade balance in goods is a little wider than the 2015Q4 average, meaning that international trade is shaping up to be a small drag on Q1 real GDP.

Consumers took their hard-earned dollars and bought cars in February. Light vehicle sales ticked down slightly from a 17.58 million unit annual rate in January, to 17.54 for February, still a very good number. Auto sales in February were strong despite volatility in financial market indicators, which contributed to a noticeable decline in consumer confidence. If confidence comes back with more settled financial indicators, we could revisit last fall’s very impressive car sales numbers.

The ISM Manufacturing Index for February increased to 49.5 percent from January’s 48.2 percent. This is still a barely contractionary number, and it is the fifth consecutive monthly reading below the break-even 50 mark. It looks like it is premature to expect the ISM-MF Index to continue its rising trend in the near term. We look for more of the same near-50 readings for a while. The ISM Non-manufacturing Index for February eased slightly to a still positive 53.4 percent, consistent with ongoing moderate GDP growth.

Construction spending for January increased by 1.5 percent, above the fairly wide plus or minus 1 percent confidence interval for this series. Total public construction was up significantly, gaining 4.5 percent in January, boosted by a seasonally adjusted 14.7 percent increase in highway and street projects. Without that unusual gain, total construction would have posted a more modest 0.3 percent gain.

According to the Texas Workforce Commission, the Lone Stare State added an impressive 31,400 jobs in January, despite ongoing job losses in the state’s important energy sector. The January job growth is on par with the robust job gains for the state seen through 2014. One month does not make a trend, but it is good news for Texas, the second largest state economy.

For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: CMAEconWeekly 03-4-2016.

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February U.S. Employment, January Trade

Strong Jobs Data Confirms Economic Momentum

  • February Payroll Employment increased by a strong 242,000 jobs, well above consensus expectations.
  • The Unemployment Rate for February was unchanged at 4.9 percent.
  • Average Hourly Earnings dropped by 0.1 percent. Average Weekly Hours dipped by 0.2 hours to 34.4.

The U.S. International Trade Gap widened in January to -$45.7 billion. The official Bureau of Labor Statistics employment report for February showed a strong net gain of 242,000 payroll jobs for the month. The unemployment rate was unchanged at 4.9 percent and average hourly earnings ticked down by a tenth of a percent. Today’s employment data confirms that the economy is maintaining momentum through a period of financial market volatility. It also aligns with our view that consumer spending will be a positive stabilizing force for the U.S. economy in 2016, allowing for ongoing moderate GDP gains in the presence of an unsettled global environment. Today’s jobs data is positive for the economy, but it does not materially lift the low odds of a March 16 fed funds rate hike by the Federal Reserve, especially considering the drop in average hourly earnings which will be viewed as a temporary easing of inflationary pressure. The drop in earnings does not indicate a softer economy. It likely stems from a shift in the mix of jobs, with perhaps fewer high-paying energy sector jobs and more low-paying service jobs. However, we expect the unemployment rate to continue to drop through the course of this year, at a slower pace than last year, keeping upward pressure on wages by occupation. Wage pressure from tighter labor market conditions, ongoing house price appreciation and rent increases plus stabilization in commodity prices is the recipe for future Federal Reserve interest rate hikes. That is still a believable scenario for the second half of this year. For now, we are expecting two 25 basis point increases in the fed funds rate this year. Hopefully, we will get some meaningful forward guidance from the Federal Reserve on March 16 to fill in the current guidance vacuum.

Mining and logging industries continued to shed jobs in February, down 18,000 for the month. Meanwhile, construction industries added 19,000 jobs. Manufacturing employment was down 16,000, mostly in durable goods industries. Retail trade gains were sizeable, up 54,900 jobs. Transportation and warehousing dropped 5,300 jobs, including railroad jobs that might be energy related. Information industries added 12,000 jobs while financial services added 6,000 for the month. Professional and business services gained 23,000 jobs, not especially impressive, but education and healthcare added an impressive 86,000 jobs in February. Leisure and hospitality gained a vigorous 48,000 jobs. Government workers increased by 12,000 for the month.

The U.S. international trade gap widened in January to -$45.7 billion. The strong dollar remains a headwind on exports, which dropped by 3.8 billion in January. Imports dropped by a smaller 2.9 billion for the month. The January real trade balance in goods is a little wider than the 2015Q4 average, meaning that international trade is shaping up to be a small drag on Q1 real GDP.

Market Reaction: U.S. equity markets opened with losses. The 10-Year T-bond yield is up to 1.85 percent. NYMEX crude oil is up to $34.67/barrel. Natural gas futures are down to $1.67/mmbtu.

Alert_03_04_2016_Employment

For a PDF version of this Comerica Economic Alert click here: Employment 03-04-16-.

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February ADP Jobs, Auto Sales

Jobs and Cars Signal Healthy Consumer Sector

  • The February ADP Employment Report showed a gain of 214,000 private-sector jobs.
  • February Auto Sales ticked down slightly to a 17.5 million unit rate.

Our thesis for this year is that consumer spending will serve as a stabilizing force for the U.S economy, allowing GDP to expand at a moderate pace in the midst of slower global growth and financial market volatility. Solid job growth is the foundation of a healthy consumer sector, allowing households to increase their spending, which accounts for two-thirds of GDP. With the first look at job growth for February and another good auto sales report, we will stick to that story. The February ADP Employment Report showed that a net of 214,000 private sector jobs were added to the U.S. economy for the month. The ADP report showed that the distribution of job growth between small, medium and large firms was fairly even. According to ADP, construction industries added 27,000 jobs. Manufacturing shed 9,000 jobs. Trade/transportation/utilities gained 20,000. Financial activities increased employment by 8,000, and professional/business services added 59,000 jobs. The ADP report does not include government workers. Over 2015 the ADP report tended to overshoot the non-government total from the official Bureau of Labor Statistics job count by about 13,000 per month. If we subtract 13k from the ADP total of 214,000, and add in about 8k government sector jobs per month (the 2015 monthly average), we come up with an estimate of 211,000 for the BLS job count of February that will be published this Friday morning. Our previous guess for February jobs was an above-consensus 210,000, so we will leave that sit as our guess for Friday morning.

Consumers took their hard-earned dollars and bought cars in February. Light vehicle sales ticked down slightly from a 17.58 million unit annual rate in January, to 17.54 for February, still a very good number. In our view, the 18 million plus sales rate from last September through November was not sustainable. We will take February auto sales as a sign of strength for U.S. consumers. The car sales rate for February was 7.39 million, which was actually the lowest sales rate in the last 13 months. However, truck sales are very strong, ticking up in February to a 10.16 million unit rate. Auto sales in February were strong despite volatility in financial market indicators which contributed to a noticeable decline in consumer confidence. If confidence comes back with more settled financial indicators, we could revisit last fall’s impressive car sales numbers.

Market Reaction: U.S. stock prices opened with losses. The yield in 10-Year T-bonds is up to 1.86 percent. NYMEX crude oil is down to $34.10/barrel. Natural gas futures are down to $1.68/mmbtu.

alert_03_02_2016_ADP

For a PDF version of this Comerica Economic Alert click here: ADP 03-02-16.

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February ISM Manufacturing, January Construction Spending

Merely Mortal Data for Super Tuesday

  • The ISM Manufacturing Index for February increased to a barely contractionary 49.5 percent.
  • Construction Spending increased by 1.5 percent in January as highway construction surged.

The ISM Manufacturing Index for February increased to 49.5 percent from January’s 48.2 percent. This is still a barely contractionary number, and it is the fifth consecutive monthly reading below the break-even 50 mark. The good news is that the February gain is the second monthly increase in the series since it bottomed out at 48.0 in December. Just two of the 10 sub-components of the series were above 50 for February. They were new orders and production. The ISM-MF new orders index is now above 50 for two months in a row, after dipping below 50 for November and December. A steady expansion in new orders would be welcome good news for the manufacturing sector, although it would not necessarily mean that employment or many of the other components would need to increase. With equipment demand for oil and gas exploration production likely to decline further, limited upside potential for the auto sector, and normal volatility in commercial and defense aircraft, plus the strong dollar, we look for only modest gains at best for new orders for manufactured goods over the next few months. So from our point of view, it looks like it is premature to expect the ISM-MF Index to continue its rising trend in the near term. We look for more of the same near-50 readings for a while. Anecdotal comments in the report were more favorable than unfavorable. Industries that reported better conditions included computers and electronics, fabricated metals, machinery and wood products and furniture.

Construction spending for January increased by 1.5 percent, above the fairly wide plus or minus 1 percent confidence interval for this series. The value of private residential construction was unchanged for the month, with a small loss in single-family construction offset by a larger gain in multifamily. Private nonresidential construction gained 1.0 percent in January. Total public construction was up significantly, gaining 4.5 percent in January, boosted by a seasonally adjusted 14.7 percent increase in highway and street projects. Without that unusual gain, total construction would have posted a more modest 0.3 percent gain.

Market Reaction: U.S. equity markets opened with gains. The yield on 10-Year Treasury bonds is up to 1.81 percent. NYMEX crude oil is up to $34.32/barrel. Natural gas futures are down to $1.71/mmbtu.

Alert_03_01_2016_ISM_MF

For a PDF version of this Comerica Economic Alert click here: ISM-MF 03-01-16.

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From the Desk of Robert Dye

Brexit Highlights Europe as a Source of Uncertainty in 2016

On June 23 the United Kingdom will vote on whether to stay in the European Union, or to leave. If the vote is to leave the EU, that does not necessarily lead to an immediate exit of the UK from the EU. That process could take years to finalize. But a Leave vote would undoubtedly increase uncertainty over the UK economy as well as uncertainty over the EU-less-UK economy. This is important to the U.S. not only in terms of our potential future diplomatic and trade relationships with a divorced UK and EU, but also because the EU collectively is such a large economic block. According to the International Monetary Fund, in 2015 the EU collectively represented about 17 percent of the global economy, while the U.S. accounted for a slightly smaller 16 percent of the global economy (calculations are on a nominal international dollar purchasing power parity basis).  A faltering EU would be a dampening force on global GDP growth, potentially coming at a time when the Chinese growth engine is also faltering.

Most British economists believe that a Leave vote would hurt the UK economy. It would also likely hurt the EU economy, mainly by increasing uncertainty and setting a precedent for other countries to leave the EU. A major difference between Brexit and Grexit is that a Greek exit from the EU was contemplated as a remedy for economic distress. Brexit is not. Brexit would potentially increase momentum for other countries, such as the Czech Republic to leave the EU as well. It could also result in a prisoner’s dilemma for Germany. Would Germany stay in the EU as support erodes and it had to foot an increasing share of the bill for failing economies like Greece?

According to a Financial Times conglomeration of recent polls, as of February 25, 45 percent of British voters favor Stay, 38 percent favor Leave and 17 percent are undecided. UK Prime Minister David Cameron has just completed negotiations with the EU that he says removes four key objections that many in the UK have about staying in the EU. One concern was that non-euro-using members of the EU would need to be protected from rule changes that would put them at a disadvantage. Another concern was about excessive rules that inhibit competitiveness. The third concern was exempting Britain from “an ever closer union” and the dominance of the EU parliament. The fourth concern was about free movement and the right to control migration.  Clearly, the European refugee crisis looms large. As the tide of refugees swells with warmer weather this spring, conflicts among EU countries will increase. This could impact the polls in the UK as the vote approaches.

The last thing the world needs right now is another source of uncertainty roiling global financial markets.  Unfortunately, that process has already begun within the UK. The sharp devaluation of the British pound so far in 2016 alerts us to the possibility of more to come.

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Comerica Economic Weekly

U.S. data released at the end of February were mixed, but the week ended on a positive note with a better-than-expected revision for 2015Q4 GDP and good income numbers for January.

Real GDP for the fourth quarter of last year was revised up from a 0.7 percent annual rate to 1.0 percent. That is not huge, but at least it is in the right direction, and therefore it slightly reduces our probability of a near-term recession. But before we wax poetic about the GDP revision, it is important to remember that it is still a weak report and the odds of a near-term recession remain elevated, in the vicinity of 30 percent. U.S. stock markets opened with gains, buoyed by the GDP revision.

Another better-than-expected number this week came from the durable goods report. New orders for durable goods for January increased at a 4.9 percent annual rate, reversing a 4.6 percent decline in December. January new orders took off with help from the always volatile commercial and defense aircraft categories. Still, core orders were good. New orders for non-defense capital goods excluding aircraft gained a healthy 3.9 percent, erasing their December dip. Shipments of durable goods increased by 1.9 percent in January, which is a nice start for 2016Q1 GDP.

Personal income for January was up a solid 0.5 percent, supported by good wage growth. Nominal spending was also up by 0.5 percent. These are also good numbers for the start of 2016Q1. The personal saving rate held steady at 5.2 percent.

Initial claims for unemployment insurance increase by 10,000 for the week ending February 20, to hit 272,000. Continuing claims for the week ending February 13 dropped by 19,000 to hit 2,253,000. Both UI claims numbers are consistent with ongoing moderate-to-strong job creation. We are on the high side of consensus with our expectation of 210,000 net new payroll jobs added for February. That data will be released on Friday, March 4.

The Conference Board’s Consumer Confidence Index retreated in February, consistent with the wobbly stock market since the first of the year. The February index dropped noticeably from 97.8 in January to 92.2.

New home sales in January were softer than expected, down 9.2 percent for the month, to a 494,000 unit annual rate. Regional sales in the West surged in December, and a reversion in January pulled down the headline number. The months’ supply of new homes on the market increased to 5.8 months’ worth. The median sales price for a new home was down 4.5 percent for the year, consistent with a shift toward middle market homes.

Existing home sales were little changed in January, gaining just 0.4 percent to a 5.47 million unit annual pace. The median sales price of an existing home was up 8.2 percent in January over the previous year. The combination of strong job growth, wage gains, low mortgage rates and still-ample pent-up demand look favorable for the upcoming spring home buying season.

The S&P/Case-Shiller U.S. National House Price Index gained 0.1 percent in December and was up 5.4 percent for the year.

It feels like the data is turning from worse-than-expected since the start of the year, to better-than-expected, at least for a while. We believe that Federal Reserve officials will remain cautious at the upcoming FOMC meeting over March 15 and 16, and leave interest rates unchanged. Forward guidance is becoming a critical issue. We wait to read how the Fed will be guiding the markets.

For a PDF version of the Comerica Economic Weekly, including forecast tables and the variables calendar, click here: CMAEconWeekly 02-26-2016.

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January New and Existing Home Sales, December House Prices

Soft Home Sales in the West, but Conditions Look Good for Spring Sales Season

  • New Home Sales for January sagged, down 9.2 percent to a 494,000 unit annual rate.
  • Existing Home Sales in January were essentially unchanged, up 0.4 percent to a 5.47 million unit rate.
  • The U.S. National Case-Shiller House Price Index was up 5.4 percent in December over a year earlier.

New home sales in January were softer than expected, down 9.2 percent for the month, to a 494,000 unit annual rate. Our first thought was weather in the Northeast, but the regional pattern confounds that argument. New homes sales in the Northeast actually increased by 3.4 percent for the month. The Midwest saw a 5.9 percent drop and the South was up by 1.8 percent. It was the West that fell out of bed in January, with new home sales down 32.1 percent. A scan of California realtor news reveals nothing exceptional for the month. So we will view this as an anomaly for now, and expect new home sales to rebound next month. The months’ supply of new homes on the market increased to 5.8 months’ worth. The median sales price for a new home was down 4.5 percent for the year, consistent with a shift toward middle market homes.

Existing home sales were little changed in January, gaining just 0.4 percent to a 5.47 million unit annual pace. The regional pattern reflects what we saw in the new home market. The Northeast posted a gain of 2.7 percent. Existing home sales in the Midwest were up 4.0 percent. The South was unchanged for the month, while the West was soft, dropping 4.1 percent for the month. The months’ supply of existing homes for sale was a tight 4 months’ worth in January. The median sales price of an existing home was up 8.2 percent in January over the previous year. The combination of strong job growth, wage gains, low mortgage rates and still ample pent-up demand look favorable for the upcoming spring home buying season. New mortgage products designed to lower barriers for first time buyers are an interesting development.

The S&P/Case-Shiller U.S. National House Price Index gained 0.1 percent in December and was up 5.4 percent for the year. Dallas home prices gained 9.6 percent over the previous 12 months. Detroit was up 7.1 percent. Los Angeles gained 6.2 percent. Miami was up 7.1 percent. Phoenix increased by 6.3 percent. San Diego gained 7.2 percent. San Francisco was up 10.3 percent.

Market Reaction: U.S. equity markets dipped at the open. The 10-year Treasury bond yield is down to 1.66 percent. NYMEX crude oil is down to $31.03/barrel. Natural gas futures are up to $1.83/mmbtu.

Alert_02_24_2016_HomeSales

For a PDF version of this Comerica Economic Alert click here: Existing _Home Sales 02-24-16.

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