Home Sales Sputter in March, Along With Hiring
By Christopher S. Rugaber and Derek Kravitz
WASHINGTON -- Momentum in U.S. hiring and home sales appears to be slowing, according to fresh data.
The average number of people seeking U.S. unemployment benefits over the past month is at a three-month high. And fewer Americans bought previously owned homes in March after mild weather boosted sales in the previous two months. A possible weakening in two critical elements of the U.S. economy suggests growth could stay modest this year.
"We are in for a few more quarters of moderate growth before stronger gains might appear," said Joel Naroff, president of Naroff Economic Advisors. More hiring is needed to drive up wages and salaries and fuel the recovery, he added.
The Labor Department said Thursday that weekly applications dipped last week by 2,000 to a seasonally adjusted 386,000. But that was only after the department revised up the previous week's data to show 8,000 more people applied for benefits than first estimated.
The four-week average, a less volatile measure, rose last week by 5,500, to 374,750. That's the highest level in three months, although it is still 9 percent lower than the level from September.
Unemployment benefit applications have started to tick up in recent weeks after months of steady declines. When applications fall below 375,000, it generally suggests hiring will be strong enough to lower the unemployment rate.
Economists said temporary layoffs stemming from the spring holidays may have inflated the figures. Many school employees are laid off during spring break and are eligible to file for benefits.
The unemployment benefits report "suggests job growth is slowing," said Jennifer Lee, an economist at BMO Capital Markets. "Still growing, mind you, but at a slower pace."
Home sales have also lost some vitality from the start of the year.
The National Association of Realtors said sales of previously owned homes fell 2.6 percent last month to a seasonally adjusted annual rate of 4.48 million. That's down from a revised 4.6 million sold in February. In healthier markets, sales typically are closer to 6 million.
Not Seeing a Strong Spring Season
A mild winter may have encouraged more people to buy in January and February, essentially stealing sales from March
"We are most certainly not set to declare that the housing recovery is over but a strong start to the spring selling season is simply not in the data," said Dan Greenhaus, chief global strategist at BTIG in New York.
There were some positive signs in the home-buying report. First-time buyers, who are critical to a housing recovery, rose slightly. Foreclosures declined. And the supply of homes for sale fell.
A smaller supply typically encourages more people to put their homes up for sale. That generally improves the overall quality of the homes on the market, which drives prices higher.
Many economists have downplayed the weak March hiring figures, noting that a warmer winter may have also led to some earlier hiring in January and February. They have noted that the economy has added an average of 212,000 jobs per month in the January-March quarter, well ahead of last year's pace.
Awaiting the April Data
Most are waiting to see the April jobs report before concluding the market has stalled. That will be released on May 4.
Deutsche Bank forecasts that employers will add 175,000 jobs this month. That's down from its earlier projection of 200,000 but better than March.
Two other reports Thursday suggest modest growth in the coming months.
The Philadelphia Federal Reserve Bank said that manufacturing output in the mid-Atlantic region slowed a bit from the previous month. Still, a measure of employment in the report rose to its highest level in almost a year.
And the Conference Board's index of leading economic indicators rose for the sixth straight month, suggesting the economy could pick up later this year. The index is designed to anticipate economic conditions in three to six months. Most of its components have been previously released.
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