In decent news out of the housing market, pending home sales edged up for the second month in April, with a .4% increase. The gain comes after a 3.4% climb in March – the first increase in nine months. According to the National Association of Realtors chief economist, “higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence”.
In other housing news, home prices rose at a slower pace in March, with the S&P/Case-Schiller index posting a 12.4% year-on-year increase in March – the smallest gain since last July.
On the upside, consumer confidence rose to the second-highest level since 2008, as consumers were more optimistic about the economy and the labor market.
Orders for durable goods rose for a third month in April on an increase in orders for electrical equipment, appliances and transportation equipment. However, casting a shadow on the report, business capital spending plans declined.
The US economy contracted for the first time since 2011 in the first quarter this year, with GDP falling -1%. Much of the decline was due to a drop in inventory building, with stockpiles growing by $49 billion for the quarter, less than half of the previous quarter’s $111.7 billion increase. The drag on inventory investment erased 1.6% from the economy’s annual growth rate.
Following that, consumer spending fell last month after posting the biggest surge in almost five years. The .1% drop in household spending marks the first decline in a year.