EconUpdate by P. Duffy
Consumer sentiment rises to highest level in a year, but still room to run
What does this mean? Consumer sentiment is still down 4.7 percent year-on-year, and consumers will remain somewhat cautious for some time, but the trend remains positive.
Consumer sentiment continued to rise in late March, reaching its highest level in a year due to the third disbursement of relief checks and better than anticipated vaccination progress. However, the key issues are not to underestimate the ultimate impact of economic policies on employment and inflation, and not to overestimate the ability of economic policies to bring any excesses to a painless soft-landing.
February personal income, spending and savings rate all fell due to combination of temporary factors
What does this mean? Severe winter weather and a pause in stimulus payments had consumers drawing down on accumulated savings, but the impact on spending was muted.
In February, personal income plummeted 7.1 percent, personal spending slipped 1.0 percent and the personal savings rate fell to a still-high 13.6 percent. A combination of severe winter weather in much of the country and a pause in pandemic-related stimulus, including extended unemployment benefits, were blamed for the declines.
Inflation tracker PCE Price Index up 0.2 percent in February and 1.6 percent year-on-year
What does this mean? Despite some rising input prices for businesses and stimulus spending, inflation remains low.
While the Fed-preferred PCE Price Index edged up 0.2 percent and 1.6 percent year-on-year, the ‘core’ index (minus food and energy) was up 0.1 percent in February and 1.4 percent year-on-year.
A record 39 percent of homes sell above list price in March
What does this mean? Strong demand and low inventory continued to keep pressure on prices during the month, with nearly 40 percent selling above list price.
For the 4-week period ending March 21, the median home-sale price increased 16% year over year to $331,590, an all-time high, while pending home sales were up 28%, new listings fell 12%, and active listings were down 42% to a new low. 39% of homes sold above their list price, an all-time high and 15 percentage points higher than the same period a year earlier.