Week of November 29–December 03, 2010

Produced by NAR Research

Weekly Economic ForecastIndicator Updated

ForecastPast Week’s Forecast

Directional Shift

GDP 2010 Q4: 2.4% 2.6% ↓

GDP 2011 Q1: 2.6% 2.5% ↑

GDP 2011 Q2: 2.3% 2.3% ↔

Unemployment rate by mid-2011:

9.5% 9.4% ↑

Average 30-year fixed mortgage rate by mid-2011:

5.0% 4.9% ↑

NAR's monthly official forecast as of December 2

Produced by NAR Research

Monday, 11/29/10 • An indicator of economic activity, the

Dallas Fed Manufacturing Outlook Survey moved up six points to 13 in November. An index value of zero points to national economic growth along historical trend rates; a negative value indicates growth rates that are below-average, while a positive value denotes above-average growth.

• Based on the survey data, all manufacturing indicators gained, including orders, shipments and capacity utilization. General business conditions, labor market and prices also showed positive advances.

• NAR released the November Commercial Real Estate Outlook, pointing to a flattening trend in the market declines and modestly improving fundamentals in 2011.

• For more information on the CREO, visit http://www.realtor.org/research/research/reportscommercial.

Economic Updates

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Tuesday, 11/30/10 • On a rise in consumer expectations

for the future, Consumer Confidence improved to 54.1 in November from 49.9 in October.  Recent NAR research showed that a post-election bounce in consumer confidence is typical.

• Case Shiller house price data was also out earlier today.  The Case Shiller index showed a slight decline in home prices in the month of September.  Measured on a year over year basis, prices were up less than 1 percent for the year.  NAR data for the same period released a month ago actually showed a slight decline for the year.  More recent NAR data for October, released last week, show an even smaller decline than September data.  Of course, these measures are national, and local price trends vary.  See our recently updated Local Market Reports to see how the trend in your metro market compares with the national trend.

Economic Updates

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Wednesday, 12/01/10 • Mortgage purchase applications were

down 5.0 percent for the week ending November 12th. Purchase applications do not take into consideration cash buyers who according to the September REALTORS® Confidence Index make up as much as 29 percent of transactions.

• Mortgage purchase applications were down 12.0 percent from the same week a year ago.

• Refinances, which made up 80.3 percent of mortgage activity, fell 16.5 percent as mortgage rates climbed 18-basis points to 4.46 percent on a 30-year fixed mortgage.

• Housing starts fell 11.7 percent in October from the previous month to a seasonally adjusted 519,000 starts on an annual basis. Starts are off 1.9 percent from the previous year.

• Multifamily homes were the primary cause of the drop as single family structures were down just 1.1 percent from September.

Economic Updates

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Wednesday, 12/01/10 (cont’d)

• Third quarter productivity rose 2.3 percent. Unit labor costs (the amount of labor producing each unit of output) fell 0.1 percent. This data shows that the employers are continuing to try and get as much out of each worker rather than hire additional workers. These are considered good indicators of future inflation; however, today’s report is no cause for concern.

• Construction spending continued to increase in October (0.7 percent), following an increase in September.

• The rise was due to a 2.5 percent increase in residential outlays mainly due to multifamily housing.

Economic Updates

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Thursday, 12/02/10 • The improvement in the job marked

stalled slightly last week with initial seasonally-adjusted jobless claims rising by 26,000 to 436,000, however 4-week moving average declined by 5,750 indicating continued long-term decline in the number of layoffs. The four-week average at 431,000 hasn't been that low since Aug. 2, 2008. Data unadjusted for seasonal effects, in fact show a drop of over 54,000 initial claims.  Four-week averages for initial claims point to employment gains in tomorrow's employment report.  

• The largest increases in initial claims were in California, followed by Pennsylvania, Kentucky, Illinois, and Texas, while the largest decreases were in Indiana, Puerto Rico, Hawaii, the Virgin Islands, and the District of Columbia.

• Pending Home Sales data were also released today. For more, read our press release.

Economic Updates

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Friday, 12/03/10 • The Bureau of Labor Statistics’

employment report carried disappointing news—the unemployment rate rose from 9.6 percent to 9.8 percent in November.

• Payroll employment edged up during November by only 39,000 jobs. For sustained growth, the economy needs to add more than 100,000 jobs per month.

• The gains were registered in temporary help services, mining and health care. Meanwhile, retail trade jobs declined.

• The hourly earnings on private nonfarm payrolls rose by 1 cent, to a rate of $22.75. Over the 12 month period ending in November, the hourly earnings gained 1.6 percent, maintaining a low level of inflationary pressure.

Economic Updates

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