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Archive for May, 2013
 
Economic Advisor: May 29, 2013
May 29, 2013


 

Real estate was a key newsmaker last week, with April’s sales of existing single-family homes, townhomes, condominiums and co-ops skirting up by 0.6 percent to an annual rate of 4.97 million over March’s pace of 4.94 million, the National Association of Realtors reported last week. This marked the highest level of sales since November 2009 when the homebuyer tax credit caused sales to surge to 5.44 million.
 
Distressed homes, such as foreclosures and short sales, comprised 18 percent of April’s sales, which was down from 21 percent in March and 28 percent in April 2012. Foreclosures accounted for 11 percent of April’s sales and short sales amounted to 7 percent of transactions for the month.
 
Looking at price, April’s median price for existing all types of homes was $192,800, marking an 11 percent gain over April 2012. This marked the 14th consecutive monthly gain in existing home prices.
 
In terms of inventory, the total amount of housing for sale at the end of April gained 11.9 percent, increasing to 2.16 million existing homes available for purchase, which represents a 5.2-month supply at April’s sales pace.
 
Switching gears to new real estate, sales of new single-family homes in April 2013 hit an annual rate of 454,000, according to last week’s report from the Census Bureau and the Department of Housing and Urban Development. April’s sales were 2.3 percent over March’s revised rate of 444,000 and a whopping 29 percent over April 2012′s estimate of 352,000.
 
In terms of price, April’s median sales price for new houses was $271,600 and the average sales price was $330,800. In terms of inventory, the estimated number of new homes for sale at the end of April was 156,000, representing a supply of 4.1 months at April’s sales rate.
 
Turning to employment, the number of first-time claims for unemployment benefits filed in the week ending May 18 dropped to 340,000, a decline of 23,000 from the prior week’s revised figure of 363,000, the Employment and Training Administration reported last week. The four-week moving average was 339,500, a dip of 500 from the previous week’s revised average of 340,000.
 
The total number of insured unemployed Americans during the week ending May 11 dropped to 2,912,000, a decrease of 112,000 from the preceding week’s revised level of 3,024,000, the Administration also reported. The four-week moving average was 2,995,250, a decrease of 23,750 from the previous week’s revised average of 3,019,000.
 
In manufacturing, new orders placed for manufactured durable goods in April grew by 3.3 percent ($7.2 billion) over March to $222.6 billion, the Census Bureau reported last week. Transportation was a key mover for April, growing 8.1 percent ($5.1 billion) to $67.6 billion.
 
Shipments of durable goods dropped 0.6 percent in April ($1.3 billion) to $227.1 billion. Unfilled orders for durable goods increased 0.3 percent ($2.7 billion) in April to $996.2 billion. Inventories of durable goods continued to stack up, growing 0.4 percent ($1.3 billion) in April to $377.9 billion. This continued an upward inventory trend, and marked the highest level since the Bureau published the series in 1992.
 
This week, we can expect:

  • Tuesday — Consumer confidence scores for May from The Conference Board.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; first quarter gross domestic product, second estimate, from the Bureau of Economic Analysis.
  • Friday — April personal income and spending from the Bureau of Economic Analysis; May consumer sentiment index from the University of Michigan.

Posted in Economic Advisor



Economic Advisor: May 22, 2013
May 22, 2013


 

U.S. retail and food services sales for April notched up to $419.0 billion, a gain of 0.1 percent over the previous month, the Census Bureau reported last week. On an annual basis, last month’s performance was 3.7 percent above April 2012′s sales, and total sales for the February-through-April period gained 3.7 percent over the same period a year ago.
 
Notable monthly changes included building materials and garden supplies, which were up 1.5 percent over February; gasoline stations, which were down a whopping 4.7 percent; non-store retailers, which were up 1.4 percent; and clothing sales, which were up 1.2 percent. Compared to last year, retail trade sales were 3.6 percent over April 2012; non-store retailers were up 15.4 percent from April 2012; and auto and other motor vehicle dealers were up 8.8 percent over last year.
 
Looking at prices consumers were paying, the Consumer Price Index for All Urban Consumers (CPI-U) dipped 0.4 percent in April, according to last week’s report from the Bureau of Labor Statistics. While down for the month, the all items index grew by 1.1 percent over the last 12 months.
 
A strong decrease in the gasoline index was the primary cause of the decline in all items index, a trend reflected by the fuel oil index, which also declined. That said the electricity and natural gas indexes increased. Overall, the energy index saw a net 4.3 percent decrease in prices.
 
Meanwhile, producer prices saw similar performance, with the Producer Price Index for finished goods decreasing 0.7 percent in April, the Bureau reported. Prices for finished goods dropped 0.6 percent in March and increased 0.7 percent in February.
 
U.S. employment saw some bad news last week, with first-time claims for unemployment benefits filed in the week ending May 11 hitting 360,000, a gain of 32,000 from the previous week’s revised figure of 328,000, the Employment and Training Administration reported. The four-week moving average hit 339,250, an increase of 1,250 from the previous week’s revised average of 338,000.
 
The total number of unemployed Americans covered by benefits during the week ending May 4 dropped to 3,009,000, a decline of 4,000 from the preceding week’s revised level of 3,013,000, the Administration also reported. The four-week moving average was 3,015,250, a drop of 21,000 from the previous week’s revised average of 3,036,250.
 
Turning to real estate, building permits issued for construction of private housing in April took a significant jump up to an annual rate of 1,017,000, marking a 14.3 percent gain over March’s revised rate of 890,000, and a 35.8 percent increase over the April 2012 estimate of 749,000, the Census Bureau reported last week. Permits issued for single-family homes in April hit a rate of 617,000, which was 3 percent over March’s revised figure of 599,000.
 
That said, starts of construction on private housing in April were at a seasonally adjusted annual rate of 853,000, which was 16.5 percent down from March’s revised estimate of 1,021,000, but was 13.1 percent over the April 2012 rate of 754,000. Construction starts on single-family homes notched down to a rate of 610,000 in April, which was 2.1 percent below the revised March figure of 623,000.
 
Completions of private homes in April dropped to an annual rate of 689,000, which was 14.3 percent below March’s revised estimate of 804,000, but 3.3 percent over April 2012′s rate of 667,000. Completions of single-family homes in April dropped to a rate of 536,000, which was 9.8 percent down from March’s revised rate of 594,000.
 
This week, we can expect:

  • Tuesday — April existing home sales from the National Association of Realtors.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; April new home sales from the Census Bureau.
  • Friday — April durable goods orders from the Census Bureau.

Posted in Economic Advisor



Economic Advisor: May 15, 2013
May 15, 2013


 

Last week was a light calendar for regular economic reports, however the week was not without significant news. Specifically, the Dow Jones Industrial Average reached its highest point in history last Thursday, hitting a high of 15,144.83. It then followed on Friday, by hitting a record high close of 15,118.49.
 
For the week, the Dow was up 144.53, or 1 percent. For the year so far, the Dow was up 15 percent, with a year-to-date gain of 2,014.35 points. Friday closed with all eyes pointed on this week, wondering if the Dow Jones could continues its historic run.
 
The Dow wasn’t the only newsmaker. Another key announcement from last week was March consumer credit, which grew at an annual rate of 3.4 percent to hit $2.8 trillion, according to last week’s report from the Federal Reserve.
 
Revolving debt, such as credit cards, dropped 2.4 percent from February’s $847.9 billion to dip to $846.2 billion in March. Non-revolving debt, such as student loans, grew by 5.9 percent from February’s $1.95 trillion to $1.96 trillion in March.
 
In employment news, first-time claims filed during the week ending May 4 ticked down to 323,000, a decrease of 4,000 from the previous week’s revised figure of 327,000, the Employment and Training Administration reported last week. The four-week moving average was 336,750, a drop of 6,250 from the preceding week’s revised average of 343,000.
 
The total number of unemployed covered by insurance during the week ending April 27 was 3,005,000, a decrease of 27,000 from the preceding week’s revised level of 3,032,000, the Administration also reported. The four-week moving average was 3,034,250, a drop of 24,500 from the previous weeks revised average of 3,058,750.
 
In wholesale trade, sales of merchant wholesalers, except manufacturers’ sales branches and offices in March dropped to $414.7 billion, down 1.6 percent from February’s revised level, the Census Bureau reported last week. That said March’s sales were up 1.3 percent from the March 2012 level.
 
Meanwhile inventories of merchant wholesalers, except manufacturers’ sales branches and offices, notched up to $503.1 billion at the end of March, a 0.4 percent gain from February’s revised level, and 4.7 percent up from March 2012′s supply. This put the March inventories-to-sales ratio for merchant wholesalers at 1.21. The March 2012 ratio was 1.17.
 
This week, we can expect:

  • Monday — April retail sales from the Census Bureau; March business inventories from the Census Bureau.
  • Tuesday — April import and export prices from the Census Bureau.
  • Wednesday — April producer price index from the Bureau of Labor Statistics; April industrial production and capacity utilization from the Federal Reserve.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; April consumer price index from the Bureau of Labor Statistics; April housing starts and building permits from the Census Bureau.
  • Friday — April leading economic indicators from the Conference Board.

Posted in Economic Advisor



Creative Ways to Use Your Tax Return
May 15, 2013


 


By now many people have received or are looking forward to a chunk of cash in the form of a tax return. If you’re one of those people, let this be the year you make your tax return work for you, rather than just parking the money in your savings. Here are some creative ideas for using your tax refund:
 
Down payment on a house. This might seem obvious; or it might seem like it doesn’t apply to you. But with historically low interest rates, it’s a great time to buy, and as home prices are slowly inching up and availability is slowly scaling down, making a move now is a smart decision. And remember, we’re not only talking about a primary home; a rental or second home can be a great investment.
 
Make an extra mortgage payment. We’ve mentioned this before, and it’s not right for everyone, but an extra payment can actually end up saving you hundreds of dollars in the long run, especially if your mortgage is only a few years old.
 
Make money-saving improvements. If you’ve been in your home for a while, you may be considering giving it a facelift with your tax return, such as a new coat of paint or refinishing the hardwood floors. Why not invest in your home and make some improvements that will save you money in the long run? Low flow toilets, faucets, shower heads, and even sprinkler systems can make a dent in your bills. Energy Star appliances can earn you tax credits while they improve your home’s efficiency and help you keep costs down. And when it’s time to sell your home, you will have increased its value to boot.
 
Pay down debt. Credit cards have extremely high interest rates. When you don’t pay off your bill each month, you’re incurring more debt, often at a 15 or 18 percent interest rate — for some folks, even higher. Pay off your credit card bills and keep more of your money for yourself!
 
Go solar. The cost of solar energy has fallen in recent years and the efficiency and available financing have improved, while utility bills keep rising. You can get a full system installed with no money down and effectively freeze your electricity bill for the next 10 or 20 years. You can even lease a system, which lets you off the hook for repairs and upkeep while still allowing you to reduce your utility costs.
 
Of course, you always have the option to make a “stress-relieving investment” and splurge on yourself: take a class, learn a skill, hire a personal trainer, take a dream vacation. With so many options to truly get your tax refund working for you, it’s a great time to really maximize your money and make the most of this year’s return. Enjoy!
 
*We are not a tax advisory firm. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions and regulations.
 

Posted in Home Front Finance



Economic Advisor: May 08, 2013
May 8, 2013


 

The U.S. unemployment rate hit a four-year low in April, after employers added 165,000 non-farm jobs during the month, which put the unemployment rate at 7.5 percent, the Bureau of Labor Statistics reported last week. This put the total number of unemployed Americans at 11.7 million people. Key sectors for job growth included professional and business services; food services and drinking places; retail trade; and healthcare.
 
The number of long-term unemployed — those jobless for 27 weeks or more — declined by 258,000 in April to 4.4 million, and their share of the unemployed dropped by 2.2 percentage points to 37.4 percent. The number of Americans involuntarily employed on a part-time basis for economic reasons, such as their hours had been cut or because they couldn’t find full time work, grew by 278,000 to 7.9 million.
 
Looking at more recent data, first-time claims for unemployment benefits filed in the week ending April 27 dropped to 324,000, a decline of 18,000 from the previous week’s revised figure of 342,000, the Employment and Training Administration reported last week. The four-week moving average was 342,250, a decrease of 16,000 from the preceding week’s revised average of 358,250.
 
The total number of unemployed workers covered by unemployment insurance for the week ending April 20 grew to 3,019,000, a gain of 12,000 from the preceding week’s revised level of 3,007,000, the Administration also reported. The four-week moving average was 3,055,500, a decrease of 18,000 from the previous week’s revised average of 3,073,500.
 
Meanwhile, the Bureau of Economic Analysis Personal reported last week that personal income had grown in March by $30.9 billion (0.2 percent) and disposable personal income (DPI) increased by $20.7 billion (0.2 percent). Similarly, personal consumption expenditures (PCE) gained $21.0 billion (0.2 percent). Real disposable income (after taxes are factored in) ticked up 0.3 percent in March, and real PCE grew by 0.3 percent in March.
 
Personal saving — DPI less personal outlays — was down in March, with Americans saving $329.1 billion, compared with $330.9 billion in February. March’s personal saving rate, which is personal saving as a percentage of disposable personal income, hovered at 2.7 percent in March, the same rates as in February.
 
In real estate news, construction spending in March skirted down to an annual rate of $856.7 billion, which was 1.7 percent under February’s revised estimate of $871.2 billion, according to last week’s report from the Census Bureau. That said, March’s rate was 4.8 percent over March 2012′s estimated rate of $817.8 billion.
 
Spending on private construction dipped to an annual rate of $598.4 billion in March, which was 0.6 percent under February’s revised estimate of $602.0 billion. However, residential home construction inched up to an annual rate of $294.9 billion in March, marking a 0.4 percent increase over February’s revised estimate of $293.8 billion.
 
Not surprisingly, consumers are feeling better about the economy. In line with some of the more positive headlines from last week, The Conference Board reported that its Consumer Sentiment Index climbed to an unexpectedly high 68.1 in April (a baseline of 100 was set in 1985), up from 61.9 in March. The Present Situation Index, which gauges how consumers feel about the current economic environment, grew to 60.4 from 59.2. The Expectations Index, how they expect economic circumstances to fare in the near term, shot up to 73.3 from 63.7 last month.
 
Looking at opinions on employment, consumers who said they expect job growth over the coming months grew to 14.2 percent from 13 percent, while those expecting fewer jobs dipped to 22.4 percent from 26 percent. Consumers who said they expect their incomes to grow increased to 16.8 percent from 14.6 percent, while those anticipating a pay cut skirted down to 16 percent from 17.7 percent.
 
This week, we can expect:

  • Tuesday — March consumer credit totals from the Federal Reserve.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; March wholesale inventories from the Census Bureau.
  • Friday — The April Treasury budget from the Treasury Department.

Posted in Economic Advisor



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