Last Week in the News – Economic Update!

Compliments of American Home Mortgage

The U.S. economy grew at a 5.3% annual rate in the first quarter, faster than the 4.8% pace estimated a month ago,
the Commerce Department reported May 25. The upward revision was due to larger inventory investment and a lower trade deficit.

Sales of new single-family homes jumped unexpectedly by
4.9% in April, their highest rate since last December. Analysts had been anticipating a decline. The median price of a new home sold in April was $238,500, up just 0.9% from a year ago. The backlog of unsold new homes rose by 2.4% to a record 565,000 homes at the end of April.

Sales of existing single-family homes fell by 2% in April, the National Association of Realtors said May 25. The median price
of an existing home sold in April was $223,000, an increase of 4.2% from April 2005. The rise was the smallest year-over-year gain since September 2001.

Orders for durable goods — big ticket items expected to last three or more years — dropped 4.8% in April, much larger than the flat or slight decline most economists were predicting. Sagging orders for aircraft, computers and electronics led the decline, the first since January.

U.S. retail sales also fell by 2.8% in the first three weeks of
May compared with the first three weeks of the previous month, according to a Redbook Research report issued May 23. The reading was below the 2.6% decline that had been forecast.

This week look for updates on unemployment and factory orders on June 2.