Economic Indicators: Weekly Update

Every week the Research staff  analyzes key data releases and explain what they mean for you and your business.  In this update, we give the highlights of the most important data releases for the week of February 28-March 4, 2011 along with graphs that show the latest movement and overall trends.  Read the full update after the jump.

At a glance, this table shows the forecast for some of the most pertinent weekly data for REALTORS® to keep in mind. This changes from week to week as new data becomes available. The directional shift notes the trend from last week’s numbers. For the full forecast from the latest Pending Home Sales release, click here.

Highlights for Monday, February 28, 2011:

• Personal income increased 1.0 percent in January. Most of the income increase was related to the Social Security tax cut which took effect at the start of January.
• Year-over-year income was up 4.6 percent.

Highlights for Tuesday, March 1, 2011:

• Today’s report from ISM on the manufacturing sector was strong in February. The index climbed from 60.8 last month to 61.4, its highest level since May of 2004.
• Construction appears to be strengthening according to the Census’ release on New Construction Spending this morning.
• The manufacturing sector touches nearly every city and is important for job creation. As it expands, jobs, incomes and optimism will improve. Production has ramped up and low inventories suggest that this trend will continue. Spending on residential construction is also good for job growth.

Highlights for Wednesday, March 2, 2011:

• Mortgage purchase applications fell 6.1 percent for the week ending February 25th. Purchase applications are a leading indicator of home sales.
• Consumers took advantage of a decline in mortgage rates, as they fell to 4.84 percent on a 30-year fixed mortgage. Refinances, which accounted for 64.9 percent of mortgage activity, fell 6.5 percent.

Highlights for Thursday, March 3, 2011:

• Very positive news came today from the new jobless claims report, with claims falling another 20,000 following the 25,000 decline last week. Currently at 368,000, the number of new claims is well below the 400,000 mark which suggests strong job gains.
• Assuming that jobless claims continue to trend down, NAR expects about 1.5 to 2 million net new jobs in the next 12 months.
• Separately, nonfarm productivity was up last quarter, 2.6 percent, while unit labor costs were slightly down, -0.6 percent. This suggests that productivity and labor cost numbers have helped businesses as they get more output per worker without an increase in the labor force; however the pressure will lead to new job creations as companies are forced to maintain output and increase revenue.

• After 21 months at 9 percent or more, the unemployment rate in February fell to 8.9 percent. The rate is down from its peak of 10.1 percent in October 2009 and from a recent peak of 9.8 percent in November 2010.
• While the improvement in the unemployment rate was slight in the month, payroll jobs grew by 192,000, their largest jump since spring 2010. The surge in net job growth was driven by the private sector which added 222,000 jobs across nearly every industry while governments shed 30,000 jobs, mostly in the state and local sector.
• If this rate of job growth continues, the economy will recover the 7.5 million jobs that were cut during the recession in about 3 years.
• Continued growth in factory orders suggests that this employment growth could continue. Manufacturers new orders for goods increased 3.1 percent for all goods, 3.2 percent for durable goods, and 3.1 percent for nondurable goods.