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A Complete Economic Update in Less Than 30 Seconds

The big news from last week was on the real estate front. Not only were existing home sales better than expected, they were up from the prior reading, to 5.77 million. Even better, home prices - via the Case-Shiller Index - were up a stunning 2.4%, versus an expected 3.0% increase. The FHFA index confirmed the better price trend. And new home sales? They were up to 504K… well above the anticipated 425K, and leaps and bounds better than the multi-year low level hit just a couple of months ago.

Don’t get too excited though. Remember, these are March’s and April’s numbers; the tax credit’s that were driving this strength have expired, and it is expected that May’s numbers will reflect that sudden lack of stimulus. If anything, this high bar is a setup for disappointment a month from now.

Continuing claims were stable, as were new unemployment claims. That jives with stagnant personal spending, though personal income was up a hair (+0.4), as expected.

On the consumer sentiment front, confidence was up a little according to the University of Michigan sentiment index, or up a lot - by 9.7% - according to the Conference Board’s measure.

Economic Calendar

Economic Calendar - Week of 05/31/10

Economic Calendar - Week of 05/31/10

This week should be just as busy in terms of economic data, including data from the real estate realm. Construction spending is due on Tuesday; pending home sales are due on Wednesday. Both are expected to show stronger numbers, but the same caveat from above applies…. the numbers reflect a stimulus that is no longer in effect.

New unemployment numbers are slated for Thursday. The actual unemployment rate is expected to be a tad lower (to 9.8%), and non-farm payrolls are forecasted to hit 500K…. well up from recent levels.

Tuesday’s car and truck sales levels should move the market a little too; car sales should be up a little, while truck sales are expected to be down just bit, to 4.1 million and 4.8 million, respectively.

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James Brumley is a freelance writer and registered investment advisor. He began his career as a broker with a major Wall Street firm, where fundamentals and long-term holding periods were core strategies. After that, he switched gears completely, becoming an analyst at a short-term trading newsletter that focused on technical analysis. He now manages client money using the best of both philosophies. His company, Bluegrass Portfolio Management, offers investors an opportunity to reap superior returns with minimized risk.