Investors had quite a bit of economic data to sift through last week. Housing starts declined by nearly 6 percent in March, but building permits – a gauge of future building activity – rose 4.5 percent. It was its highest level in 3 and a half years.
Sales of previously owned homes fell 2.6 percent in March highlighting the fragile recovery. New claims for jobless benefits fell by 2,000 to 386,000, much less than expected, signaling softness in the labor market. In the week ahead, we expect earnings reports from Apple, Delta Airlines and Xerox, as well as data on interest rates, home prices and GDP.
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The Federal Reserve will meet to discuss the economy and interest rates. During their March meeting, the Fed left its key interest rate – which affects mortgage, credit card and student loan rates – unchanged and said the economy continues to expand moderately but housing remains depressed.
The February Case-Shiller Home Price Index report showed in January home prices fell nearly 1 percent, marking five consecutive months of losses. San Francisco, Atlanta and Portland showed the biggest declines.
We’ll gain further insight on the economy with the advanced estimate of first quarter GDP, which looks at all the goods and services produced from January through March. During the previous quarter, the economy grew by 3 percent – its fastest pace of growth in 18 months.