U.S. Home Sales Fall, Jobless Claims Rise
According to recently released data, sales of new single-family homes in the United States fell in December by 9.3%, marking their biggest drop in about 16 months. The seasonally adjusted annual rate amounts to 625,000 units for the month. At that pace, it would take 5.7 months for demand to fill housing supply on the market. A 6-month supply is what’s considered “healthy.”
In January, the number of people who filed for unemployment benefits rose from its 45-year low. The seasonally adjusted number was 233,000, after an increase of 17,000. In the second week of January, claims were at their lowest since 1973 at 216,000. If strong wage inflation persists, the Fed may be prompted to raise interest rates at a faster pace this year compared to last year.
The tight labor market may help explain the high demand for housing. Nationwide’s senior economist Ben Ayers believes “demand for single-family housing [will] remain robust, driven by job gains and the aging of the millennial generation.”
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