Last Week Economic News: 1/25/2009 - 1/31/2009

On Monday, January 26, the National Association of Realtors said existing home sales rose 6.5% in December to a seasonally adjusted annual rate of 4.74 million units. Economists had expected an annualized rate of 4.4 million units and suggested that bargain prices are bringing buyers back into the market.

The median existing home price in December 2008 was down 15.3% to $175,400 from December 2007. It was the biggest year-over-year drop since recordkeeping began in 1968.

The Conference Board said its leading indicators of future economic activity rose 0.3%, a better reading than the 0.3% drop economists had expected. The index indicates the direction of the economy over the next three to six months and the reading was the first gain in six months.

On Tuesday, the Standard & Poor’s/Case-Shiller 20-city housing price index dropped a record 18.2% from November 2007 to November 2008. Since August 2006, the 20-city index has declined every month.

Consumer confidence hit a record low in January. The Conference Board reported that its consumer confidence index fell to 37.7 in January from a revised 38.6 in December. In January 2007, the index was at 87.3.

The Commerce Department said Thursday that new home sales fell 14.7% in December to a seasonally adjusted annual rate of 331,000. It was the slowest monthly pace on records dating back to 1963.

Orders for durable goods fell for a fifth consecutive month. The Commerce Department said orders dropped by 2.6%, worse than the 2% decline economists had expected.

Gross domestic product — the total output of goods and services produced in the United States — decreased at an annual rate of 3.8% in the fourth quarter of 2008, the Commerce Department announced Friday. It was the lowest pace since the first quarter of 1982, when output contracted 6.4%. Economists had expected a much worse 5.5% contraction.

Upcoming on the economic calendar are reports on pending home sales on February 3 and factory orders on February 5.