It was a fairly light week, as far as economic data was concerned.

Existing home sales increased in January by +4.3% to 4.57 million units, which was higher than forecast but was somewhat tempered by some adjustments to the December level, which muted the effect.  The median sales price of existing homes was unchanged (based on seasonal adjustments) and the year-over-year change was still negative at -2%.  The ‘months supply’ of homes’ has declined to the lowest level since spring 2006, at around 6.1 months.  This may be from a decrease in listings than a strong improvement in sales, however. Read more

Retail Sales for January, at +0.4% month-over-month, were a bit lower than expected due to a drop in auto sales (although fleet sales may have had something to do with this).  With autos removed from the measure, the figure rose to +0.7%, which ended up being a bit higher than expected.  The individual results were mixed, as sales were up for sporting goods, electronics and department stores, but declined for non-store retail and online.

Business inventories were up +0.4% for January, roughly in line with consensus and on the same trend as the previous month.  The non-auto retail number was below the government’s estimate and may result in a lower 4^th Quarter GDP adjustment. Read more

It was a light week on the U.S economic side.  December international trade data of net imports/exports resulted in a widening of the trade deficit from November’s $47.1 billion to $48.8 billion in December.  Trade deficit-oriented news is often looked at negatively in the media, but should be viewed in context.  One note likely covered very little is the fact that U.S. exports reached an all-time record high of over $2 trillion in 2011.  We remain the world’s engine, and this bodes well for upward revisions of the Q4 GDP figures.

The JOLTs job openings rose from 3.16 million in November to 3.34 million in December, which was good news.  Initial jobless claims fell to 358,000 for the week ended Feb. 4, which was down from 373,000 the previous week and was lower than consensus.  The four-week moving average (which is looked at more closely, due to its smoothing effect of outliers) is the lowest it’s been since May 2008.  On the moving average basis, continuing claims are also down from the past several months. Read more

Personal income was up +0.5% for December, a bit more than expected, while spending was flat.  The consumer savings rate increased from a fairly steady 3.5% to 4.0% for December.  Core PCE inflation was a bit higher than forecast, resulting in a +1.8% year-over-year rate.

The Case-Shiller home price index declined a seasonally-adjusted -0.7% in November, which was a bit more than expected and translated to a year-over-year decline of -3.7%.  While several Midwest/west cities like Phoenix and Denver saw gains, Chicago and Detroit continued to see weaker housing conditions.  In reviewing a recent piece on housing prices across the U.S., U.K., Canada and Australia (among a few others), it was interesting to see that the American average ratio of median home price to median household income across 200 major markets stood at 3.0, which is just at the high side of the long-term average and the cheapest of the group of nations surveyed.  Of course, the U.S. is an extremely bifurcated market, with continued extremely expensive conditions in coastal areas like California and New York, and less expensive conditions in the Midwest and South, based on these metrics.  Read more