Economist's Commentary: August 21, 2008

Quick Take on the Economy: August 21, 2008

By Harika "Anna" Barlett, Senior Research Analyst

The leading index decreased 0.7 percent in July according to the Conference Board's measurement. This was a sharp decline, and the second decrease in the past three months.
Building permits, stock prices, and weekly initial jobless claims contributed to the decline and offset the positive contributions from the interest rate spread, consumer expectations, and manufacturers' new orders for capital goods.

The number of initial jobless claims fell last week for the second week in a row. The Labor Department stated that the advance figure for seasonally adjusted initial claims was 432,000, a decrease of 13,000 from the previous week's revised figure of 445,000.
While this number is below what was expected for this period, a level of 400,000 or higher is considered to be an indicator of a weakening labor market. Additionally, four-week moving average increased from the previous week by 7,250 to 445,750.
Based on the latest available data, continuing claims also decreased by 17,000 from the preceding week to a seasonally adjusted number of 3.362 million in the week ending August 9th.
The highest unemployment rates were in Puerto Rico, Michigan, New Jersey, and Pennsylvania. The largest increases in initial claims were in Georgia, New York, and Puerto Rico. The largest declines were in Florida, Michigan, Illinois, and California.

Continuing soft conditions in the housing and job markets contribute to a weak economy.
Unemployment rate is expected to stay at least at its current level until the elections.

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

Comments? Questions? E-mail NAR Research.

NAR members, learn how you can add this commentary to your Web site, blog, or newsletter. Read more >