Economist's Commentary: May 8, 2008

Quick Take on the Economy: May 8, 2008

The number of first-time claims for unemployment checks fell by 18,000 to 365,000 in latest week.
After some serious concern in March as this figure rose strongly and in one week surpassed 400,000 (which would correlate with recessionary conditions), the unemployment claims have been trending down.
The total continuing claims on checks also fell by 10,000 to 3.02 million.

Private industry reports on sales by the likes of Wal-Mart and Target showed quite decent figures.
The very detailed government data on retail sales comes out in the middle of month, but if a similar trend is realized, then we can pretty much declare that the recession is off.
The rising sales are occurring even before the actual receipt of the tax rebate checks. Perhaps, some of it could be forward buying (knowing that checks are in the mail) in the current quarter with little left for later quarters. That will not change the overall economy but make the second quarter better at the expense of later quarters.

The House will debate and vote on the housing stimulus package today or tomorrow. It contains tax-credit measures for first-time homebuyer on any homes.
The Senate had already passed a bill on homebuyer tax credit for a purchase of foreclosed homes.
The White House has hinted at a veto. White House has not come out opposing the House-version of homebuyer tax-credit measure specifically, though it opposes other aspects of the bill. It opposes the Senate-version.
After the House vote, there will be a conference of House and Senate. The bill will then go the White House for signing into law. The veto possibility will depend on what happens at the conference.

The economy could surprise on the upside in the second quarter.
A critical housing bill working its way in Washington that can measurably and quickly bring first-time buyers back into the marketplace.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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