Macro signs: Home sales a pleasant surprise

September 2, 2010

A traffic light is pictured beside the Wall Street road sign in the financial district of New York September 19, 2008. REUTERS/Lucas Jackson

A daily look at the macroeconomic news and its impact on the mood of investors and the direction of the economy. Are we heading for a double-dip recession?

Pending home sales were up 5.2 percent in July, a surprise rise although sales were down year over year. As our report points out, “home sales have fallen sharply following the end in April of a popular tax credit for home buyers and the surprise gain in July raised hope the decline was close to a bottom.”

There was also good news on the labor front after data showed new claims for unemployment benefits fell last week. At a seasonally adjusted 472,000 the number is still high but has been moving in the right direction for the past two weeks.

The third piece of positive news this morning was July factory orders edging up after two straight months of decline.

“What we see in the home sales data and factory orders is all evidence that we are not going to implode and won’t go into a double dip, for now,” said Howard Simons, strategist at Bianco Research in Chicago.

Before the data was out some were musing on the outlook of the economy and Bloomberg had a twist: Things are so bad they can only get better, according to the Bloomberg article. It’s not that a recession won’t happen but that slow growth in a battered economy is more likely, analysts say in the report.

And who knew the government has a recovery blog? The Telegraph points out that if a recovery is in place it is certainly not following the normal script. The article looks at what can be done by the government, and whether the blog’s name should be changed to “Double–Dip.”

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