4/18/2023 – MetroIntelligence Economic Update by P. DUFFY
MetroIntelligence Economic Update by P. DUFFY
April builder confidence rises another point to 45 as new homes provide critical housing supply
Builder confidence in the market for newly built single-family homes in April rose one point to 45. For the fourth straight month, builder confidence has increased due to a lack of resale inventory despite elevated interest rates. Currently one-third of housing inventory is new construction, compared to historical norms of a little more than 10%. The HMI index gauging current sales conditions in April rose two points to 51 and the component charting sales expectations in the next six months increased three points to 50. This marks the first time these components both returned to the 50+ range since June 2022. The gauge measuring traffic of prospective buyers remained unchanged at 31. This is the first time the traffic component failed to improve in 2023.
March retail sales fall more than expected, up 2.9 percent year-on-year
Advance estimates of U.S. retail and food services sales for March 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $691.7 billion, down 1.0 percent from the previous month, but up 2.9 percent above March 2022. The decline as mostly due to larger-ticket items often requiring financing. The CPI for the same periods rose 0.3 percent from February and 5.0 percent year-on-year.
March consumer sentiment up 2.4 percent, but down 2.6 percent year-on-year
Consumer sentiment was essentially unchanged this month, inching up less than two index points from March. Sentiment is now about 3% below a year ago but 27% above the all-time low from last June. Rising sentiment for lower-income consumers was offset by declines among those with higher incomes. While consumers have noted the easing of inflation among durable goods and cars, they still expect high inflation to persist, at least in the short run. On net, consumers did not perceive material changes in the economic environment in April.