US Stocks ended the week modestly higher in the lowest trading volume seen since the end of last year. Foreign stocks were mixed. A very strong housing start number helped build confidence in an improving economy and consumer prices rose after months of declines. The Federal Reserve’s minutes released Wednesday indicated that there will likely not be a rate increase in June. Commodity prices including oil fell while the dollar strengthened.
In particular this week:
- The National Association of Homebuilders reported
- Homebuilder confidence fell to 54 in May for the fourth time in five months. However, any reading above 50 represents a favorable view of the market for newly built, single-family homes.
- Existing owned home sales fell 3.3% in April, an increase had been forecast. The drop was blamed on supply as 40% of the houses sold went for more than their listing price.
- The Commerce Department reported that housing starts rose a whopping 20.2% in April, the largest monthly percentage increase since 1991 and the largest monthly unit increase since 2007. Single family construction rose 16.7% and multifamily construction rose 27.2%. Keep in mind that the number of units being constructed are still less than half of the peak reached in 2006.
- The Labor Department reported:
- First time claims for unemployment in the prior week rose 10,000 to a seasonally adjusted 274,000, slightly worse than forecast. Claims for the week before were unrevised at 264,000. The four week moving average of claims fell by 5,500 to 266,250 its lowest level since April 15, 2000. Also, the number of continuing claims fell 12,000 to 2,211,000 the lowest since November 11, 2000.
- Consumer prices rose 0.1% in April from the previous month. Excluding volatile food and energy, prices rose 0.3%, the largest since January 2013 and more than expected. From a year earlier prices fell 0.2% and excluding food and energy prices were up 1.8%.