Thursday, July 24, 2008

Jobless Claims Rise, Unemployment Steady, Existing Home Sales Fall

- Initial Jobless Claims for this week rose to 406K versus estimates of 380K and 372K the prior week.

- Continuing Claims fell to 3107K versus estimates of 3160K and 3116K prior.

- Existing Home Sales for June fell to 4.86M versus estimates of 4.94M and 4.99M in May.

BOTTOM LINE: The number of Americans filing first-time claims for unemployment benefits rose last week, Bloomberg reported. Weekly jobless claims can be hard to gauge in July as automakers temporarily trim staff to upgrade factories in anticipation of new car models. The four-week moving average of claims rose to 382,500 from 378,000. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, held steady at a historically low 2.3%. 16 states reported a decrease in claims. I except jobless claims to tick lower next week and trend modestly lower through year-end.

Sales of previously owned US homes fell in June, Bloomberg reported. The median existing home price fell 6.1% year-over-year to $215,100. The number of previously owned unsold homes on the market at the end of June represented 11.1 months’ supply at the current sales pace. Purchases of condos and co-ops rose 1.7% to a 590,000 pace. Purchases fell in three of four regions, paced by a 6.6% decline in the Northeast. Sale gained 1% in the West. While sales fell to new lows just slightly, I still think they are stabilizing around current levels and will tick higher into year-end, which should make a meaningful dent in inventories.

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