A bright spot in the latest U.S. economic data came courtesy the National Association of Realtors, which reported its pending home sales index showed a rise of 5.2% in October to its highest level in more than five years after increasing by an upwardly revised 0.4% the previous month. Economists had forecast a rise of 0.8%.
"Given the very high correlation between this indicator and actual existing home sales activity, we expect the pace of home sales in November to improve," said Millan Mulraine, senior U.S. macro strategist at TD Securities.
But Thursday's other datapoints prompted some caution commentary from economists.
The Labor Department reported that initial jobless claims for the week ended Nov. 24 were 393,000, a decrease of 23,000 from the previous week's upwardly revised figure of 416,000. The four-week moving average was 405,250, an increase of 7,500 from the previous week's average of 397,750.Economists were predicting initial jobless claims would come in at 390,000. Bricklin Dwyer, an economist at BNP Paribas, said that jobless claims may have receded from their post-hurricane surge but remained elevated. "For the month, claims are running 38k higher than in October, which is suggestive of a very weak employment report in November," he noted. On top of the lingering influence of the Hurricane Sandy superstorm, the week ended Nov. 24 was affected by the Thanksgiving holiday, which likely decreased the number of claims filed in the holiday-shortened week, Dwyer said. Continuing claims for the week ended Nov. 17 were 3.287 million, a decrease of 70,000 from the preceding week's upwardly revised level of 3.357 million. The second estimate on U.S. third-quarter gross domestic product showed a rise of 2.7%, compared with the previous 2% growth estimate. GDP was forecast to rise by 2.8%. Paul Ashworth, chief U.S. economist at Capital Economics, said that while the GDP release showed a welcome upward revision most of the growth was driven by inventory building and government spending. "The bigger the [inventories] build up in the third quarter, the more likely we are to see a run down in the fourth," he noted.
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