Economics Headlines, US claims, PPI Update, Home sales

Economics Headlines

·         US claims today  : Initial claims for jobless benefits in the week ending April 17th took out some of the big move up that occurred over the prior two weeks, declining 24,000 to 456,000. While it is encouraging that the worrying spike up was partly removed, it is still the case that last week's claims were above the 450,000 average in the month of March, so even with the most recent decline, the pace of improvement in the claims data has clearly slowed down. Similarly, the continuing claims data still shows improvement, though at a more gradual pace than seen in the second half of last year. 

·         PPI Update:    The March Producer Price Index (PPI) was up 0.7% on the back of rising food and energy prices. Excluding these two categories, the core PPI was up a modest 0.1% for the second straight month and is only up 0.8% over the past year, the second lowest print in the last six years. Almost all of the increase in core was due to a 5.9% increase in jewelry prices, a 27-year record; outside of this category, core prices were flat last month. 

·         Home sales:  - Existing home sales jumped 6.8% in March to an annual sales rate of 5.35 million units. Apparently, the expiration of the homebuyer tax credit at the end of this month is pulling forward sales into March, and presumably April as well. There is no clear way to assess how much of last month's gain was due to the tax credit versus other factors, though the anecdotes suggest the preponderance of the gain owes to buyers seeking to take advantage of the tax credit.

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