Macroblog

In the economic news today, put this one (via Reuters) in the plus column:

Pending sales of U.S. homes rose unexpectedly in May, reversing three consecutive monthly declines and suggesting the housing market may be cooling gradually, a trade association report showed on Thursday.

The National Association of Realtors' Pending Home Sales Index, based on contracts signed in May, rose 1.3 percent to 113.4 from 111.9 in April.

About that Home Sales Index, the National Association of Realtors has this to say:

The Pending Home Sales Index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 closely parallels the level of closed existing-home sales in the following two months.

Another source of smiles (from Reuters) emerged by way of one of the newest new measures of labor market activity:

The Monster Employment Index rose in June for the second consecutive month, driven by greater online demand for white-collar workers.

The index rose 4 points to 171, based on broad-based growth spanning all nine U.S. Census Bureau regions...

"This points to broad, continued momentum in the economy heading into the third quarter," said Steve Pogorzelski, group president at Monster Worldwide, parent company of Monster, a leading resource for global online careers and recruitment.

I'm not exactly sure what to make of that Monster index yet, but it was supported by another new-fangled labor market indicator yesterday, and from an old-fashioned one today (from the Associated Press, via msnMoney):

Labor Department reports the number of Americans filing first-time claims for unemployment benefits declined last week. It indicates the job market remains firm.

The government says applications for jobless benefits totaled 313-thousand last week, a decline of two-thousand from the previous week...

The four-week moving average, which is less volatile, rose by 25-hundred to more than 308-thousand. That's at a level analysts believe portrays a healthy job market.

In case you are worried about getting carried away, here's a shot of downbeat news, from MarketWatch:

The nonmanufacturing side of the U.S. economy expanded at a slower pace in June, according to the Institute for Supply Management.

The ISM nonmanufacturing index fell to 57.0% from 60.1% in May, the industry group reported Thursday. This is the lowest level since January. Read full survey.

Economists said the decline fit with the slower pace of activity in the second quarter, but disagreed whether this was the start of a trend that would last through the rest of the year or quickly turn around.

Economists disagreed sharply about the significance of the slowdown.

Richard Iley, economist at BNP Paribas, called it "more evidence that the May soft patch is broadening out into the fully fledged slowdown we have been expecting this year."

On the other hand, John Ryding, economist at Bear Stearns, said the survey "remains consistent with fairly solid growth toward the end of the second quarter."

"The question is whether this reflects a persistent trend brought on by higher interest rates or a temporary response to the March/April spike in energy prices. We believe that it is a combination of the two, which should allow for some reacceleration in GDP in the third quarter," said Steve Stanley, chief economist at RBS Greenwich Capital.\

Brian Wesbury, chief economist at First Trust Portfolios in Lisle, Illinois, said reports of the death of the U.S. economy were overstated...

One economist, Ian Shepherdson of High Frequency Economics, said the index has little forward-looking value and said its headline simply lags core retail sales performance.