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THE NORTHWEST ECONOMIC MAINLINE 04·27·2009
What to Watch This Week
- Consumer-based indicators are set to appear in both the beginning and the end of this week with the Conference Board reporting Consumer Confidence for the month of April on Monday morning, and the University of Michigan/Reuters reporting Consumer Sentiment on Friday morning. My expectation is both indexes will show a slight uptick over last month's figures, yet remain far from optimistic, still hovering above record lows.
- Advance first quarter Gross Domestic Product figures are planned for release Tuesday morning by the Department of Commerce. Having just come off the fourth quarter of 2008 with a 6.2 percent decline in GDP, preliminary projections for the first quarter are less than encouraging with analyst consensus at or near a troubling -4.0 percent.
- Advance GDP figures will be important to pay attention to because GDP figures are usually telling and straightforward. They are also the generally accepted measure of U.S. economic growth or contraction, and very difficult for the media to spin. Everyone acknowledges that the first quarter was challenging; just how bad was it, is now the question...
- Look for earnings announcements from local companies such as: Plum Creek Timber, PACCAR, drugstore.com, and Expedia, Inc. to appear throughout the week. In addition, look for other major earnings announcements to shape market sentiment, including Verizon, Deutsche Bank, Pfizer, Sun Microsystems, Time Warner, ExxonMobil, Dreamworks, Office Depot, Aflac, Burger King, Goodyear, Qwest, Kellogg, Motorola, Safeway, Starwood Hotels, Chevron and MasterCard.
What I Saw Last Week
- Last week, real estate announcements were both abundant and noteworthy. NAHB chief Economist David Crowe offered his revised forecasts for housing starts for 2009 through 2010, and needless to say, Mr. Crowe revised his forecasts downward, significantly...His predictions can be referenced in the link provided below.
Housing Forecast
- The Department of Commerce announced Friday that new home sales fell 0.6 percent to a seasonal adjusted annual rate of 356,000 in March. Figures would have been more positive had February's figures not been revised upwardly by 6 percent; however, sales figures weren't the point of emphasis.
- Instead, statistics also revealed that new home sales in the West region surged more than 15 percent from one month earlier, and national inventory levels had declined to 311,000, down nearly 5.2 percent from February's level of 328,000. Based on current sales, the government indicated that the supply of new homes is currently estimated at approximately 11 months. Increasing sales rates and declining inventory levels are both very positive signs that will hopefully continue through spring and summer.
- Existing homes sales figures from the National Association of Realtors weren't quite as positive. According to NAR statistics, existing home sales fell to an annual rate of 4.57 million in March from a revised pace of 4.71 million in February. Buried within the report though, was information highlighting that housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes. As with new home inventory levels, this is a VERY positive sign.
Quote/Link of the Week
As many may have noticed from the logo and name change, Gardner-Johnson LLC is now Gardner Economics LLC! While there is no change in management structure or level of service and commitment to both our clients and Master Builders Association members, this is a very exciting step for us here at the firm. With a new website and new digs, we look forward to continuing to provide you all with the Economic Insights that you have come to know and expect!
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