Unemployment
benefits claims were near a three-month low last week and factory activity in
the Mid-Atlantic region showed a strong resurgence suggesting the economy is
regaining some strength. But housing sales were at a 1½ year low in February
due to a low supply of home inventory.
Much of the recent negative
economic indicators has been blamed on bad winter weather. Federal Reserve
Chair Janet Yellen on Wednesday said the unusually cold and snowy winter played
a big role in disrupting economic activity, and she suggested a rebound was
coming.
Job Market Improves
Initial claims for
state unemployment benefits increased 5,000 to a seasonally adjusted 320,000
last week, the Department of Labor reported. The rise, which was smaller than
economists had expected, kept claims close to the three-month low hit in the
prior week. A four-week moving average of new claims, which cuts volatility to
provide a better gauge of underlying conditions, hit its lowest level in more
than three months.
In a separate report,
the Philadelphia Federal Reserve Bank said its business activity index rebounded to 9.0 in
March from -6.3 in February. Any reading above zero indicates expansion in the
region's manufacturing.
The report, which
covers eastern Pennsylvania, southern New Jersey and Delaware, showed a rebound
in new and unfilled orders at factories in the region. Shipments also bounced
back, but inventories fell. Employers opted to increase hours for existing
workers rather than expand payrolls.
Housing Market Sluggish
Though sales of
previously owned homes fell again in February there is optimism they will pick
up as better weather returns. The National Association of Realtors said
existing home sales slipped 0.4 percent to an annual rate of 4.60 million
units. That was the lowest level since July 2012.
While the weather has
hampered sales, a run-up in mortgage rates and prices has also taken a toll.
Additionally, low inventories of listed properties has given buyers little to
choose from. Supply did rise in February to 5.2 months’ worth, which is the
highest in nearly 12 months.
The 30-year fixed
mortgage rate has dropped from a peak of 4.49 percent in September to about
4.30 percent in February, but it is still a full percentage point higher than
it was a year ago.
The median price for
a previously owned home rose 9.1 percent in February from a year earlier.
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