A barrage of U.S. economic data was released this week, including statistics on the state of the housing market, consumer-confidence figures, and numbers that show the spending and income of Americans. The data show that, while Americans might be optimistic about the job market, there could be a gap between economic expectations and economic reality.
There’s reason for both optimism and caution. For instance, hiring numbers have been fairly steady, and Americans are buying houses despite the Fed’s recent interest-rate hike. The S&P/Case-Shiller U.S. national home-price index, which looks at housing prices in 20 cities, saw a 5.9-percent increase. According to a report by the National Association of Realtors, the demand for housing is strong: Its pending home-sales index, which looks at contracts signed in February, jumped 5.5 percent to a 10-month high. Experts believe that the strong housing numbers are because people believe the labor market is strengthening.
Initial unemployment claims are another reason for optimism: The number of Americans filing new unemployment claims dropped to 258,000 last week. While that decline is less than anticipated, these initial claims have been below 300,000 for over 100 weeks. That’s the longest streak at that level since the 1970s, and the figure is at its lowest level in four decades. The decline in claims suggests a healthy labor market, and is often seen as a proxy for companies avoiding layoffs. But the fact that the indicator isn’t falling as much as expected has experts questioning whether the labor market might be losing momentum.