In Review: Week of April 6th, 2020. The COVID-19 pandemic continues to wreak havoc on the labor sector. The latest Initial Jobless Claims filing was another whopping number, coming in just shy of the record filings set in the previous week.
Inflation news also made headlines, as the wholesale-measuring Producer Price Index and the more important Consumer Price Index for March were released. As expected, inflation fell in March due to the lack of pricing pressure.
The National Federation of Independent Businesses released their small business optimism index for March, and it’s no surprise that it fell to 96.4 from 104.5. This is the lowest level since October 2016, with the decline from February the largest on record. The NFIB explained the obvious: “The outbreak has left few, if any, owners unscathed. The economic impact is immense, and now, the questions are how long will it last and how quickly can the small business sector recover once on the other side.”
CoreLogic released its home appreciation index for February and while this lagging report pre-dated the pandemic, there is a key – and positive – point to take away from it.
The data showed that home prices rose 0.6% in February and 4.1% annually, which was an increase from 4% in the prior report. The cities with the highest annual basis increases were Washington DC (4.8%), Boston (4.5%) and Los Angeles (4.3%). While this report pre-dated the pandemic, the key takeaway is that it highlights just how strong the housing sector was beforehand.
Interestingly, CoreLogic did not report their usual forecast for appreciation over the next 12 months, due to the uncertainty caused by the coronavirus. However, before this last report, they were forecasting over 5% appreciation in the next 12 months. Housing is typically a long-term investment, and while we may see a bit of a dip in appreciation over the next year, we expect housing to lead the recovery.
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