Memorial Day Economic Snapshot
Just like the dentist says, regular checkups are best. I’m talking economic indicators, rather than whatever might be going on with your molars. As we head into the first big summertime holiday of 2016, here’s some fodder for friends and family who might tell you America is no longer great: car sales, residential home sales and weekly unemployment gains are in record positive territory.
Let’s start with cars—you know, where most of you will be spending a good chunk of your extended weekend. WardsAuto (a great place to learn about car interiors and engines for fellow auto geeks) forecasts that U.S. automakers will deliver 1.52 million light vehicles this month. That number doesn’t just sound big, it is. That puts the seasonally adjusted annual rate (SAAR) at 17.3 million. Car sales are still very strong, if slightly off 2015 peaks, which aren’t sustainable.
|Hopefully your Memorial Day weekend involves some family fun!|
While the report said nothing of vacation homes, sales of traditional homes rose for the third consecutive month in April, their highest level in more than a decade according ot the National Association of Realtors. “All major regions saw gains in contract activity last month, expect for the Midwest, which saw a meager decline.” So far, pending home sales are up 4.6 year over year.
We may be in the heart of the Midwest, but our red-hot real estate market certainly isn’t slowing down anytime soon. It’s pandemonium trying to get a house up here in Minneapolis, and it’s probably not sustainable—but it's definitely a healthy sign for our economy up here.
Moving down to the southern Midwest (or “Upper South,” as I prefer), the Kansas City Fed reports that regional manufacturing activity slightly declined in May, however those businesses reporting into Uncle Sam predict a modest pickup in manufacturing later this year. Positive auto sales will certainly help that feedback loop.
And then there are weekly unemployment claims from the Department of Labor, which reported that claims decreased to 268,000. That may sound like a lot, but this nugget marks 64 consecutive weeks of initial claims below 300,000—the longest streak since 1973. That is not a typo, and is excellent news for increasing workforce participation and, one would hope, to encourage employers to give everybody a nice, fat raise.
I couldn’t send you packing without a look at gas prices, which always seem to jump just when Americans hit the road en masse. The current average price of a gallon of regular is $2.31, down from $2.73 at this time last year—meaning you have permission (and the funds) to buy an extra box of fireworks or case of grapefruit beer. Maybe you’d like both.
America’s economy is looking pretty great these days. Hopefully your weekend involves a healthy dose of our scenic beauty, which may calm you down the next time you hear the country’s heading straight for the dumps.