U.S. Pending Home Sales Improve

Home sales recovered during December after falling sharply in November with the (since-extended) expiration of an $8,000 first-time home buyers tax credit. The National Association of Realtors (NAR) reported that December pending home sales rose 1.0% from November. Home sales remained up 20.1% from the January low and the latest increase matched Consensus expectations.

Modest monthly gains in home sales were recorded across the country. 

These home sales figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001 and the data is available in Haver's PREALTOR database.

Recent Development in Mortgage Finance from the Federal Reserve Bank of San Francisco can be found here.

After hitting the high last June the pump price for regular gasoline has been roughly unchanged. Last week, the price slipped to $2.66 and compares to $2.69 reached during June. Nevertheless, prices remained up 41% from last year. Yesterday, the spot market price for a gallon of regular gasoline was near last week's level at $1.94 but down from the January high of $2.14. The figures are reported by the U.S. Department of Energy and can be found in Haver's WEEKLY & DAILY databases.

Earlier strength in the price for a barrel of light sweet crude (WTI) oil eased somewhat. Last week's price of $74.03 for a barrel of light sweet crude (WTI) was down from the high of $82.59 reached three weeks earlier. Yesterday, the spot price of $74.43 was up slightly from last week. Nevertheless, prices have risen from $71.53 early this past December and are more than double the December 2008 low of $32.37.· Demand for gasoline last week posted a 1.0% decline versus one year ago. That decline compared to a 3.9% increase at the beginning of October. Breaking away from earlier y/y strength, the demand for residual fuel oil fell 19.8% y/y. Distillate demand fell 9.8% y/y, a decline more moderate than the 21.6% y/y shortfall at the beginning of last July. Inventories of crude oil and petroleum products fell in January by 6.1% from the July high and were up just 0.4% from one year ago.

As temperatures moderated, U.S. natural gas prices backed off to an average $5.46 per mmbtu (15.0% y/y) from the high of $6.50 early in January. Nevertheless they remained up from $3.35 in November, triple the September low but down by half from the high reached in early-July of 2008 of $13.19/mmbtu.

The energy price data can be found in Haver's WEEKLY database while the daily figures are in DAILY. The gasoline demand figures are in OILWKLY.· Real-time inflation Forecasting in a Changing World from the Federal Reserve Bank of New York can be found here 

German retail sales rose by 0.8% in both real and nominal terms (ex autos) in December. The rise still leaves the 3-month nominal growth rate for sales in a mild negative path while in real terms retail sales are flat over three months. In the quarter the annual rate pace for both real and nominal sales is just below 1%. Car sales that had boosted consumer activity due to government incentives to buy a new car and scrap an old one have now left sales week. Auto registration fell by 15.7% in December after falling by 9.8% in November. Auto registrations are now off by 4.7% Yr/Yr

The trend for the German consumer is still poor. There is a very gradual improvement as the negative growth rates are climbing slowly back toward zero. But at this pace the German consumer is not posed to take the German economy anywhere.

Data for retail sales, excluding motor vehicles and motorcycles, in France and in Germany were released today.  The latest date for France is November and for Germany, December.

Retail trade in Germany continues to disappoint.  Both the volume and value of trade increased 0.8% in December but they are no higher than they were October.  The volume of trade in December was 97.0 (2005=100) compared with 97.9 in October.  The corresponding figures for the value of trade were 98.9 and 100.0. With the GfK Consumer Climate Survey released last week pointing to a continuing deterioration of the consumer climate in January and February, the outlook for retail sales is not encouraging. The first chart shows that the declining trends in both the value and the volume of retail trade, which began in early 2008, are continuing. 

The picture in France is more encouraging.  Although both volume and value have had their ups and down, the declines in the volume and value of retail trade have been less severe than those in Germany and the trends for both appear to have begun to turn up since May of this year.  There was no change in the value of trade in November--the index remaining at 105.2; there was a slight decline in the volume of trade to 107.8 from 107.9 in October.  The value and volume of retail trade in France are shown in the second chart.

Since the data are available only in index form, the absolute volume and value of retail trade are unknown.  All we know is that, in the case of Germany, the volume of retail trade in December was 3% below its volume in 2005 and the value, 1.1% below 2005.  In France, the volume of retail trade in November was 7.8% above its 2005 volume and the value, 5.2% above.  The volume and value of retail sales in Germany are still below levels reached in 2005, while in France the volume and value of retail sales have surpassed 2005 levels.