Forex Investment and Currency Trading

Existing home sales fell to 5.10mn in August, down from 5.24mn in July and below consensus (5.35mn) estimates. The move lower does not change the underlying trend of improvement, however, as sales in August were well above readings in H1 09. The release also showed that the inventory of existing homes on the market continues to trend lower.

August sales declined in both single-family (4.48mn from 4.61mn) and condominiums and coops (0.62mn from 0.63mn). Sales fell in three of the four regions, with only the West showing an increase. The number of homes on the market fell to 3.622mn in August from 4.062mn in July, and the months’ supply of inventory fell to 8.5 from 9.3. While the months’ supply is still elevated relative to readings in 2000-05, it is down notably from the peak of 11.3 in April 2008. The inventory figures are not seasonally adjusted, but this does not affect the trend of improvement; the August reading of 8.5 months’ supply is well below last August’s 10.6. The median sales price of existing homes fell 12.5% y/y in August, less of a decline than the -13.6% in July and the trough of -17.2% in April; this trend is in line with other house price measures that have shown less of a y/y decline in recent months.

US jobless claims reinforce downward trend

Initial jobless claims in the week of September 19 declined to 530,000 from an upwardly revised 551,000 last week, bringing the four-week moving average to 553,500. This was below consensus estimates of 550,000. Continuing jobless claims also declined to 6.128mn from a revised 6.261mn a week prior, and the insured unemployment rate edged lower to 4.6% from 4.7% previously. Despite the upward revisions to last week’s data, today’s report reinforces the message of improvement in the labor market as the four-week moving averages of both initial and continuing claims continue to trend lower. With all of the claims data for the survey week now in hand, market is forecasting a 175,000 decline in payrolls in September, less than the 216,000 drop in August, and a rise in the unemployment rate to 9.8% from 9.7%.