Here’s a quick look at the most significant economic indicators of the day and what they tell us.
CoreLogic Home Price Index
Prices for single-family homes rose 2.6% from March to April and were 20.9% higher than April 2021, marking another record pace for year-over-year growth, according to the CoreLogic Home Price Index. CoreLogic, a data and analytics firm focusing on residential real estate, is forecasting that home price growth will slow to a more moderate pace of 1.2% in May and by next April, annual growth will have decelerated to 5.6%. “Buyers who closed on their home in April had locked in their mortgage rate in February or March, when rates were lower than today,” said Patrick Dodd, president and CEO of CoreLogic, in an analysis. “With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability. As a consequence, our forecast projects slowing price growth over the coming year.”
U.S. International Trade in Goods and Services
The U.S. trade deficit narrowed more than expected in April, declining 19% to $87.1 billion, and cancelling out the entire increase in March, according to data from the Census Bureau. The gap between imports and exports was the smallest for any month this year, and a welcome drop after March’s record $107.7 billion contributed to a decline in first-quarter GDP. Exports increased by 3.5% in April to a total of $252.6 billion, while imports fell for the first time in nine months to $339.7 billion, a decrease of 3.4%. Some economists expect a smaller gap to help the economy grow again in the second quarter. Exports are likely to continue to rise this year, while consumers may cut back on spending, tamping down imports, they said.
Consumer Credit
The country’s total outstanding balance on credit cards and other revolving loans rose $17.8 billion to $1.1 trillion in April, finally returning to levels seen before the pandemic began, according to the Federal Reserve’s monthly consumer credit report. The figures reflect all balances, whether they wind up being paid off fully or carried month-to-month, so there’s no way to distinguish how much of the growth reflects indebtedness versus spending. Tighter budgets and fewer places to spend money shrank the outstanding balance early on in the pandemic, but it’s been steadily increasing for about a year and a half now. April’s pace of growth did slow but the data shows consumers are still benefiting from low unemployment and average wage increases in the face of inflation and higher borrowing costs. “April’s gains reflect the continued willingness of households to spend,” Moody’s analyst Shandor Whitcher wrote in a commentary.
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