FAST FACTS ABOUT TODAY’S ECONOMIC DATA:
* Existing Home Sales put up a clunker in December (down -10% Y/Y).
* German ZEW Confidence remains depressed, but improved in December.
* Still no BREXIT fallout in the U.K. Job Market as unemployment improved.
* Mexico risks remain elevated as unemployment begins to turn up.
EXISTING HOME SALES DOWN -10% Y/Y:
It appears that the December buyers’ strike didn’t just hit the stock market. According to the National Association of Realtors, Existing Home Sales for the first time in three months, down -6.4% M/M at a Seasonally-Adjusted-Annual-Rate of 4.99 million homes in December. However, on a Y/Y basis, existing home sales are now down -10.3% Y/Y (versus -6.8% prior), which is the slowest pace since May 2011. Geographically, there were declines across the United States: the Midwest (-11.2% M/M), the Northeast (-6.8% M/M), the South (-5.4% M/M), and the West (-1.9% M/M).
Lawrence Yun, NAR chief economist, said, “The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
EXISTING HOME PRICES DOWN ONCE AGAIN:
Also, Median Existing Home fell for the fifth time in six months, down -1.4% M/M and slowed to +2.9% Y/Y to $253,600 in December (+4.1% Y/Y prior). Furthermore, the Mean Existing Home Price also fell for the fifth time in six months, down -1.1% M/M and slowed to +1.6% Y/Y to $292,800 (+2.2% Y/Y prior). Note, the average 30-year conventional commitment rate fell -23bps to 4.64%. In December, total inventory fell for the sixth consecutive month, down -10.9% M/M to 1.55 million homes and months’ supply fell to 3.7 months (3.9 months prior). Also, all-cash sales were 22% of transactions in December (21% prior). Moreover, first time home buyers accounted for 32% of sales (versus 33% previously) and the average listing lasted 46 days (up from 42 days prior).
GERMAN ZEW CONFIDENCE IMPROVED BUT REMAINS DEPRESSED IN JANUARY:
According to the ZEW Center for European Economic Research, German Economic Expectations improved +2.5 points to -15.0 in the month of January. Nonetheless, this is the 10th consecutive negative reading. Furthermore, the Eurozone Economic Expectations improved +0.1 point to -20.9 but the ZEW USA Economic Expectations index fell -6.1 points to -38.4. Lastly, the Current Economic Situation for Germany declined for the fourth consecutive month, down -17.7 points to 27.6 (lowest level since January 2015) and the Current Economic Situation for the EU declined -6.8 points to 5.3 (lowest level since February 2017).
U.K. UNEMPLOYMENT RATE FELL TO 4.0% THANKS TO RECORD EMPLOYMENT IN NOVEMBER:
According to the U.K. Office for National Statistics, the unemployment rate in the U.K. improved to 4.0% in the month of November (4.1% prior). In the month, total employment increased +59k to a record high 32.535 million, with full-time employment up +53k to 24.021 million and part-time employment up +6k. Furthermore, it should also be noted that total unemployment slipped -8k to 1.372 million.
MEXICAN UNEMPLOYMENT RATE AT HIGHEST LEVEL IN 2 YEARS:
According to INEGI, Mexican Unemployment Rate increased to 3.57% (seasonally adjusted) in the month of December (versus 3.31% prior). In fact, this is the highest level since December 2016. In the month, the unemployment rate for male workers increased to 3.43% (3.15% prior); however, the unemployment rate for female workers improved to 3.24% (versus 3.44% prior). Lastly, it should be noted that the not-seasonally adjusted unemployment rate increased slightly to 3.35% (3.26% prior) and it is up significantly versus 3.13% in December 2017.