Here’s a quick look at the most significant economic indicators of the day and what they tell us.
Jobless Claims
The number of people initiating claims for unemployment benefits fell by 17,000 to 232,000 last week, putting things back on course after an unexpected increase the previous week, seasonally adjusted data from the Department of Labor showed. The latest figures for continuing claims also showed the omicron wave of COVID-19 receding. They fell by 112,000 to 1.48 million—a fresh low since 1970. The new data is further evidence that employers are reluctant to lay off their workers, especially now that the worst of omicron seems to be over, economists said.
New Home Sales
After two months of increases, sales of new homes dropped in January, declining 4.5% to a seasonally adjusted annual rate of 801,000, the Census Bureau reported. The pace of January sales was 19% slower than a year earlier, a sign of the impact shortages of building materials and workers are having on builders, said Charlie Dougherty, an economist at Wells Fargo Securities. Momentum is likely to suffer more as the year goes on, as higher prices and rising mortgage rates make it unaffordable for more prospective buyers, according to Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
Gross Domestic Product, Second Estimate
The U.S. economy grew at an annual rate of 7% in the fourth quarter, not 6.9%, the Bureau of Economic Analysis said in revising its preliminary growth figures. Economists have predicted growth would slow significantly in 2022. Not only has the pandemic aid many consumers got last year expired, but the Federal Reserve—in order to fight soaring inflation—is expected to raise its benchmark interest rate for the first time in years. The newest wrinkle is Russia’s conflict with Ukraine, which risks fueling still higher inflation, economists said.
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