Pending home sales surprised on the upside in December. On a monthly basis, pending home sales rose by 6.3% M/M, while a flat outcome was expected. The previous figure was slightly upwardly revised from -4.0% M/M to -3.7% M/M. Looking at the details, the rebound was driven by an improvement the Midwest (12.8% M/M) and an South (13.0% M/M), while pending home sales remained weak in the West (- 3.7% M/M) and Northeast (-1.7% M/M). The picture on the housing market is mixed. On the one hand, the NAHB survey on homebuilders’ sentiment, the housing starts & permits and the New Home sales still show a very depressed state and no signs of improvement whatsoever. On the other hand, Existing and Pending Home sales show some early signs of improvement. It is well-documented that about halve of these sales are foreclosed houses that are sold at distressed prices. We don’t disregard the latter development, but think that it isn’t enough to be confident the housing market is about to turn the corner. Tight credit and rising unemployment and the need to deleverage of household still offsets the lower prices of houses and the strong rise of affordability. Nevertheless, should the housing market bottom, it would be a major achievement that warrants more optimism on the economic outlook.
US car sales slumped to an annualized 6.9 million units, which fell not only substantially short of the 7.7 million expected, but was actually the weakest figure since June 1982. Sales fell 11.4% M/M and even 42% Y/Y. All carmakers except Hyundai posted dismal sales figures.
EMU: Producer prices show fifth consecutive decline
In December, euro zone PPI plunged by 1.3% M/M against the consensus estimate of -1.2% M/M. The November figure was downwardly revised from -1.9% M/M to - 2.0% M/M. Excluding energy, producer prices fell by 0.6% M/M due to a decline in intermediate goods (1.2% M/M) and non-durables (-0.2% M/M). Nevertheless, the data are rather outdated, but nevertheless confirm the downtrend seen in the euro zone CPI data.
