US Economic Round-Up – Pending Home Sales Decline AgainMarch 27, 2014
Quite a bit of US data was released this morning. The major releases were GDP 3rd revision, Corporate Profits, Initial Jobless Claims, & Pending Home Sales. Let’s take a quick look at each.
Starting in reverse order, Pending Home Sales fell for a record 8th straight month (there was a 12-month period in the 2nd half of 2005 and fist of 2006 were pending sales were down every month except for one very small gain). As we have noted before, pending home sales tend to lead existing home sales, so this does not suggest a bounce in existing home sales in the near future.
Initial Jobless Claims had a very nice improvement and the four-week moving average improved to a 6-month low.
Corporate profits ended 2013 at an all-time high and corporate profit margins are nearly at an all-time high. After-tax corporate profits (with IVA and CC adjustments) were nearly 8% higher year-over-year in 2013 which almost exactly the average yearly change over the past 30 years.
And finally, the 3rd revision of 4Q13 GDP improved but slightly less than what consensus was hoping for (2.6% vs 2.7%). The residential housing market negatively contributed to GDP in the fourth quarter for the first time sine 3Q2010. Intellectual property products contributed 15 bps to fourth quarter GDP.