On the downside, the economy tapped on the brakes in the first quarter, as GDP shrank .7%, revised down from a previous estimate of tepid .2% growth. The economy contracted as the trade gap widened more than previously reported while inventories grew at a slower pace. Exports sank 7.6% and imports rose 5.6%, and the trade gap subtracted the most from growth in 30 years.
On a brighter note, pending home sales gained in April for the fourth consecutive month, rising 3.4% to reach the highest level in 9 years. The National Association of Realtors said that buying demand is strong: “Realtors are saying foot traffic remains elevated this spring despite limited — and in some cases severe — inventory shortages in many metro areas. Homeowners looking to sell this spring appear to be in the driver’s seat, as there are more buyers competing for a limited number of homes available for sale”.
In other positive news out of the housing market, sales of new homes rebounded in April, climbing 6.8% to an annual rate of 517,000, after a sharp 10% drop in March. The new home sales rate has topped 500,000 for three of the past four months, which has tightened up inventories – at the current pace the market has a 4.8 month supply.
US oil production surged to a 43-year high, as the Department of Energy reported that production reached 9.566 million barrels per day in the week ended May 22nd, marking the highest production since 1972.
On Tuesday, the IRS announced that identity thieves used the agency’s website to steal taxpayer information and file fraudulent returns. Between February and May, thieves used data obtained elsewhere to access old tax transcripts for around 100,000 US households, which they then used to file $50 million in fraudulent refunds (criminals that filed fraudulent returns in 2013 got an estimated $5.8 billion, according to the US Government Accountability Office). The IRS said that it temporarily shut down the “Get Transcript” feature on its site.