U.S. home sales for the year will be weaker, and price appreciation will be smaller than previously forecast, a realtors group said. In its monthly economic outlook, the National Association of Realtors lowered expectations for the two key housing indicators but said strong economic fundamentals signal that the market will stabilize. The median home price - the price at which half of the homes sell for more and half for less - is likely to rise 1.6 percent to $223,000 for all of 2006. During the white-hot housing market of 2005, prices appreciated 12.4 percent. The group also said existing home sales are expected to drop 8.9 percent to 6.45 million for the year.
Big Drop Seen In Winter Heating Bills
Homes heating with natural gas can expect to pay 13 percent less than last year thanks in part to forecasts for a warm winter. Bills for homes heating primarily with natural gas are expected to be about $119, or 13 percent, less this winter. Residential home prices for natural gas are expected to be $12.23 per thousand cubic feet compared to $14.64 per mcf last winter. EIA, the government agency that tracks energy statistics off all types, said the drop was due to forecasts for a warmer-than-usual winter and a big drop in price compared to last year. Last year heating bills, and especially natural gas bills, were abnormally high due to Hurricane's Rita and Katrina, which devastated large parts of the Gulf Coast and severely disrupted oil and natural gas production.
U.S. August Wholesale Inventories Rise 1.1%
Inventories and sales each rose by 1.1%, keeping the inventory to sales ratio at 1.15, equal to the record low hit in May. In the past year, sales are up 12.5%, while inventories are up 9.7%. The figures are not adjusted for price changes. Inventories of automobiles fell by 0.9%, the report shows, while sales gained 1.5%.
Jobless Claims Tick Higher
First-time claims for U.S. jobless benefits inched up 4,000 to 308,000 last week, nearly matching expectations. However, new claims for state unemployment insurance benefits filed by Saturday may not have captured about 15,000 workers who went on strike Oct. 5 at Goodyear tire plants in the United States and Canada.
Jobless claims were revised up to 304,000 from the preliminary 302,000 for the week ended Sept. 30.
The four-week moving average of new claims, which irons out volatile weekly data to provide a better picture of underlying labor market trends, eased 750 last week to 313,250.
The District's economy showed modest growth since mid-August; however, growth was mixed and there is concern about the sustainability of lower energy prices and a continuing slowdown in the auto sector and residential construction. Most district manufacturers reported steady production with production forecasted to remain at current levels for the next six months. However, reduced activity in the auto sector is tempering the outlook for some manufacturers. Retailers experienced mixed sales activity with lower gas prices and cooler weather helping boost sales at some District outlets. Commercial builders reported strong activity but were concerned that inquiries were beginning to taper off. New home sales continued to be soft with several builders saying they have no backlog. Banking contacts reported a gain in core deposits and an increase in corporate borrowing. And the demand for trucking and shipping services continues to soften.
On net, hiring across the District was steady. Staffing firms reported job openings were moderately increasing in August and September with demand coming from professional business services and healthcare. Wage pressures were not seen as an issue at this time. Almost all contacts said that the rise in input costs has moderated and cite a drop in energy prices as the reason. Manufacturers attempting to raise their prices met with a mixed degree of success. Retailers generally reported holding their prices steady.
Eighth District--St. Louis