Economic Notes for the Week of December 24th

Manufacturing related news:

(-) Superstorm Sandy’s impact is still being felt in the manufacturing sector.  The December Empire State Manufacturing Survey came in at -8.1, weaker than the expected -1.0.  The general business conditions for New York manufacturers have been declining at a modest pace for five consecutive months.  The new orders index dropped to -3.7 from November’s +3.08.  The shipments index decreased six points from the prior month to 8.83.  Manufacturers in the New York City metro area reported roughly 7% lower revenues in October and about 5% revenue loss in November because of Sandy.  Indexes for the six-month outlook remained weaker than their levels earlier this year, though most future indexes were higher than in November.

(+) The Philadelphia Fed released its December 2012 business outlook survey.  The district’s manufacturing conditions beat market expectations.  The current activity index was up 8.1%, reversing the downward trend of -10.7% in October due to Sandy’s impact.  New orders, shipments and employment activities all improved.  The survey’s future indexes predict increased activity over the first half of next year.

Real estate related news:

(+) The National Association of Home Builders Housing Market Index rose by one point to reach 47 in December, marking its eighth consecutive rising month.  Yet the index trails the median forecast.  Meanwhile, builder confidence in the market for newly built, single-family homes grew to the highest level since April of 2006.

(-) Housing starts in November declined by 4.1% to an annual rate of 565,000 in the single-family category, lower than the October figure of 589,000.  In the multi-family category, November had an annual rate of 861,000 housing starts, 3% below October’s estimate of 888,000 but up 21.6% since November 2011.  The decline in starts was felt mostly in the West and to a lesser extent in the Midwest.  Data on housing starts were a little disappointing from month-over-month comparison but continued improving in terms of year-over-year reading.

(+) Overall building permits exceeded investors’ expectations.  Multi-family permits posted a solid 3.6% month-over-month gain with an annual rate of 899,000.  Single-family permits were at a rate of 565,000, 0.2% weaker than the October figure.

(+) Existing home sales for November rose 5.9% to an annual rate of 5.04 million, exceeding expectations by 3.8%.  Sales were 14.5% higher than last November’s 4.4 million-unit pace.  The South saw sales rise the most with a 7.9% increase and the West gained the least with a 0.8% increase.  Not only did the number of completed sales transactions pick up, but home prices also recovered due to the low supply in inventory.  The total housing inventory at the end of November fell 3.8% to 2.03 million, which represents a 4.8-month supply. This is the lowest inventory level since September 2005.  As a result, the national median existing home price was up 10.1% year-over year in November, marking the ninth consecutive monthly price increase. Read more