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Fluctuations and Forecasts

May 25, 2011 – 4:59 pm

As reported yesterday we had the second month in a row where new home ‘sales’ rose. The rise for April was 7.3%. Of course that was from a very low number in February and sales are still depressed. As we saw last week new ‘construction’ is still very weak.

This morning the Durable Goods report for April showed a slowdown of 7.4%, and core capital goods, a report that excludes transportation and government spending, was also down. The core capital goods were sharply up last month 5.4% but for April it was down 2.6%. This is a closer gauge as to what private industry is doing.

We appear to be in a soft spot in our economy. We had one last year about this same time. Still most experts are still holding on to their estimates of 3% growth of GDP going forward, meaning a pick up from the first quarter. To support the U.S. economists’ opinion the OECD (Organization for Economic Cooperation and Development) increased their U.S. projections for 2011 GDP growth from 2.6% from 2.2% just yesterday.

It’s a never ending process, this serious game of Economics.

Good Trading
Steve Peasley

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