After disappointing declines in home sales last week, the housing market saw some good news: pending home sales rose 3.4% in March…the first gain in ninth months, and the biggest gain since May 2011.
Consumer confidence dipped slightly in April, but remained near a six-year-high. The measure declined as consumers’ views towards current business and labor market conditions were less favorable. On the upside, the outlook for the future is positive: “While sentiment regarding current conditions may have slipped a bit, consumers do not foresee the economy, or the labor market, losing the momentum that has been building up over the past several months”, according to the director of economics at the Conference Board.
The harsh winter froze the economy, as growth stalled to .1% for the first quarter this year, after 2.6% GDP for the fourth quarter last year.
Seeing past the wintery GDP report and noting that “growth in economic activity has picked up recently, after having slowed sharply during the winter”, the Fed voted on Wednesday to continue tapering its stimulus program, cutting its bond buying to $45 billion per month, the fourth straight $10 billion cut. The committee also stated that further reductions in “measured steps” are likely.
Bolstering the Fed’s outlook, Friday’s jobs report showed that the economy added 288,000 jobs in April. The unemployment rate dropped from 6.7% to 6.3% – the lowest since September 2008…however, that headline was tempered by the fact that the labor force participation rate dropped to the lowest level since March 1978 as fewer people entered the workforce.