MetroIntelligence Economic Update by P. DUFFY
Existing home sales decline 7.2 percent in February and 2.4 percent year-on-year
In February, existing-home sales fell to a seasonally adjusted annual rate of 6.02 million. Sales were down 7.2% from the prior month and 2.4% from one year ago. The inventory of unsold existing homes slightly increased to 870,000 as of the end of February, equivalent to 1.7 months of supply at the current monthly sales pace. The median existing-home sales price rose to $357,300, up 15.0% from one year ago. This marks 120 consecutive months of year-over-year price increases, the longest-running streak on record.
Leading Economic Index rebounds 0.3 percent in February, but significant headwinds remain
The US LEI rose 0.3 percent in February, partially reversing January’s decline of 0.5 percent. However, the latest results do not reflect the full impact of the Russian invasion of Ukraine, which could lower the trajectory for the US LEI and signal slower-than-anticipated economic growth in the first half of the year. The global economic impact of the war on supply chains and soaring energy, food, and metals prices—coupled with rising interest rates, existing labor shortages, and high inflation—all pose headwinds to US economic growth.
Industrial production edges up 0.5 percent in February, but capacity still below long-term average
Total industrial production rose 0.5 percent in February to a level that is 103.6 percent of its 2017 average. Total industrial production in February was 7.5 percent higher than its year-earlier level, but severe winter weather in February 2021 significantly suppressed industrial activity that month. A more useful comparison shows that the index has advanced a still-strong 4.2 percent since January 2021. Capacity utilization for the industrial sector increased 0.3 percentage point in February to 77.6 percent, a rate that is 1.9 percentage points below its long-run (1972–2021) average.