Week in Review: April 28, 2023

New home sales jumped 9.6% in March to their highest level in a year and are now 26% above their cycle low set last July. Pending home sales fell 5.2% in March, well below the consensus estimate of a 0.5% increase. This was the first decline in four months, and the largest drop since September. Pending home sales are down 23% from a year ago.

Inflation, as measured by the personal consumption expenditures price index (PCE), eased slightly, increasing 0.1% in March, compared to February’s 0.3% pace. Core PCE  increased 0.3% in March unchanged from February. On a year-over-year basis, core PCE ticked down to 4.6% from a revised 4.7%. Personal incomes rose another 0.3% in March, following a similar increase in February, while consumer spending was flat from the prior month. Increased spending on services was almost entirely offset by decreased  spending on goods.

Consumer confidence fell in April to a six-month low. Future economic conditions and job availability both deteriorated, as the jobs outlook was the worst since March 2013. Consumer inflation expectations for the year ahead came down slightly but are still meaningfully higher than pre-pandemic levels

Durable goods orders rebounded 3.2% in March, the first increase this year and second largest gain since July 2020, driven by a 78% surge in civilian aircraft orders. Excluding transportation, core orders were up a much smaller 0.3%. On a year-over-year basis, durable goods orders eased to 3.0%, the slowest pace since October 2020, while core orders slowed to 3.2%, the least since early 2021.

Of Note