Week In Review 5.28.2019

Housing—New home sales came in below expectations, falling -6.9% in April to a 673K-unit pace. However, data for March was revised upward, and sales are up 7.0% versus a year ago alongside lower mortgage rates. Existing home sales for the same month also declined, down -0.4% to a 5.1 million-unit pace. Despite lower mortgage rates, resales have fallen in five of the past six months and are down -4.4% year-over-year.

Durable Goods Orders fell -2.1% in April, marking the second decline for the measure in the past three months. The biggest driver for the soft print was weakness in the volatile aircraft category, which fell -25.1%. Nondefense capital goods orders ex-aircraft, also referred to as core business orders which are a proxy for CapEx, slipped -0.9% in April, its first decline this year. On a year-over-year basis, both durable goods orders and core orders moderated to 0.4% and 2.5%, respectively, the slowest rates since early 2017. This reflects a notable deceleration in 2019 factory activity.

Jobless Claims—At 211K, initial unemployment claims remained low in the May 18 week. However, the print was slightly ahead of April figures, which will likely limit expectations for the May Employment Situation Report. The 4-week average at 22.3K was also lower week-over-week, an encouraging sign in isolation, but the data point also showed a sizeable 18.8K rise from a week ago.

After failing multiple times to secure the necessary votes to pass her Brexit plan, UK PM Theresa May announced her resignation so as to allow a new PM to guide Britain through the Brexit process.