Tax Credit A Strong Stimulant For Exisiting Home Buyers In April

Existing home sales soared in April as existing home buyers rushed to take advantage of the tax credit that expired at the end of the month.

On Monday, the National Association of Realtors reported that existing home sales jumped 7.6% last month to a seasonally adjusted annual rate of 5.77 million units, up from a rate of 5.36 million in March. Sales year-over-year were up 22.8%.

Even though the jump was widely anticipated, it still beat forecasts. The consensus among economists was that resales in April would only rise at an annual rate of 5.65 million units.

The median price of all existing homes also rose in April. Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month.

Details of the report show comparable gains for both single-family homes, up 7.4%, and condos, up 9.1%. The Northeast led the regional breakdown of gains.

Jobs Returning to Nation's Capitol Region

Jobless rates fell in Washington D.C., Maryland and Virginia last month, according to government data released Friday. It was the first regionwide decline in unemployment rates since the recession of 2009.

According to the April data from the federal Bureau of Labor Statistics, Washington D.C., experienced the most dramatic drop in April's measure, falling to 11% from 11.5% in March. Maryland's unemployment rate fell to 7.5% from 7.7% and Virginia's fell to 7.2% from 7.3%.

Many economists over the weekend agreed that the data reflected a real drop in joblessness and that it underscores ongoing evidence of a sustained recovery cycle.

"This is the first time all three [unemployment rates] declined in tandem," said Sara Kline, an economist at Moody's Analytics. "The labor force has been growing for the last couple of months and there's been a downtick in unemployment."

According to the Washington Post, a survey conducted in April among recruiters in the District, Maryland and Virginia, showed a dramatic increase in hiring in the first quarter. "To see four straight months of unemployment going down and over-the-year job growth -- these trends are going in the right direction," said Joseph P. Walsh Jr., director of an employment services agency in the region.

"Things certainly are headed in the right direction," said Eric M. Seleznow, executive director of the Maryland Governor's Workforce Investment Board.

In Virginia, more than 28,000 jobs were added, 14,100 of them in Northern Virginia. "It was an encouraging month," said Ann D. Lang, senior economist at the Virginia Employment Commission.

The growing strength of the job market continues the positive trend nationally that we've been tracking here for over a year now -- a trend that now appears quite likely to be only a few months away from netting the U.S. economy 500,000 new jobs per month.

Japan's Growth Up 4 Straight Quarters - GDP now at 4.9%

In Q1 2010, the Japanese economy grew at a quarterly rate of 1.2% the government said on Thursday. The four straight quarters of growth now bolster assertions that Japan’s recovery is holding firm.

Their annualized growth rate of 4.9% was released by the Japanese Cabinet Office and accelerated from 3% for the Japanese economy’s fourth quarter of 2009.

Much like the U.S. economy, Japan's private consumption makes up about 60 percent of the economy, but exports also play a key role in the healthy growth rates. Recovery in Japan has been assisted by a rebound in mainstay exports of cars and electronics, which both posted the fourth year-on-year rise in March. The report confirms that the continued strength is lifting domestic production and wages in the country.

Retail Start Strong In Q2

Retail sales in the U.S. climbed more than forecast in April, indicating the economic recovery is gaining momentum int the second quarter of 2010.

Sales increased 0.4 percent in April. Last week's Commerce Department report also upped the measure for March to a 2.1 percent gain -- larger than previously estimated. Production rose 0.8 percent, the most in three months, the Federal Reserve said.

Another report showed consumer sentiment improved in May following four straight months of payroll gains, suggesting Americans will keep shopping to help sustain the expansion of the world’s largest economy.

“We’re seeing a broadening of the recovery,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts, who correctly forecast the gain in industrial production. “Consumers are still engaged. There is some pent-up demand out there.”

On Top Of A Growth Engine

Back in July 2009, Intel asserted that the young recovery of 2009 would be anything but lackluster.

On Tuesday, the leaders of the chip giant re-asserted their claims for 2010 and beyond.

Paul Otellini, Intel's CEO, told analysts that its earnings per share and revenue should grow at an average annual rate in the "low double-digits" over the next few years. "We are on top of a growth engine," Mr. Otellini said.

You may remember that last year -- in the face of a global financial crisis -- Intel chose to spend $7B in new U.S R&D facilities, while competition retrenched in the face of credit woes. Intel can now exploit those technological advantages and continue to deliver new products with much higher performance and lower power consumption. Otellini stated that those advances now drive the company's products into a plethora of new devices such as cellphones, digital TVs, car electronics, cameras, and other consumer electronics.

"Intel has a unique set of attributes that no one can replicate," Mr. Otellini said. "This stuff gets harder to do and we are going to get better at it."

For Intel, it looks like 2010 (and perhaps 2011) will also be anything but lackluster.

The Euro Zone Will Defend Its Money: Experts Hail Resolute Action

“The message has gotten through: the euro zone will defend its money,” French Finance Minister Christine Lagarde told reporters in Brussels early Monday.

With massive resolve after a 14 hour meeting, 16 euro nations agreed to offer financial assistance worth as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank (ECB) will counter negative and “severe tensions” in “certain” markets by purchasing government and private debt.

Marco Annunziata, chief economist at UniCredit Group in London, quickly released a statement following the ECB announcement: “This truly should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion.”

“I think they will have bought themselves a significant amount of time to do the right thing,” said Barry Eichengreen, an economics professor at the University of California, Berkeley.

“This sets a precedent for the rest of the life of the Central Bank and will have likely surprised even the most seasoned observers,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group. “The ECB’s intervention was necessary to short circuit the negative feedback loop...”

The swift and united action will likely now turn most eyes back onto the fundamentals of a worldwide economic recovery that is accelerating and a U.S. jobs market that is growing again.

Jobs Growth In April Adds Over A Quarter Million New Positions

The U.S. added 290,000 jobs in April, the biggest increase since March 2006, with broad gains throughout the economy.

Most of the net new jobs came from the private sector -- excluding temporary Census workers -- non-farm jobs rose by 224,000, the Labor Department said on Friday.

In addition, payroll data for the prior two months was revised to show that 121,000 additional jobs were created than initially reported. The Labor Department said 230,000 jobs were created in March, instead of the original figure of 162,000, and the February measure was revised from a loss of 14,000 to a gain of 39,000.

As we speculated back in November 2009, net jobs growth began around Christmas and hiring has now netted new jobs in the first four months of the year. The additions reverse nearly two straight years of net job losses.

The string of employment growth represents the best four-month performance for jobs increases in 10 years. The return to jobs growth following a recession is perhaps one of the swiftest on record in the U.S.

Many naysayers scoffed at our linear trending charts claiming that a return to substantial jobs additions by spring 2010 was too optimistic. The reality is that the positive trend toward strong jobs creation continues -- with summer projections for U.S. labor market improvement firmer than ever.

Buffett on U.S. Economy: "Significant Improvement"

Over the weekend, Warren Buffett, was reported to say that the economy is showing significant improvement for the first time since the financial crisis of 2008 and 2009.

There is "significant improvement" at Berkshire's industrial units, including Marmon and metalworking company Iscar, he said Sunday, expanding on comments he made a day earlier at his company's annual shareholder meeting in Omaha.

Buffett's comments come on the heals of a Friday report that showed the U.S. economy has expanded for three quarters in a row. The Commerce Department said that preliminary measures showed the economy grew at an annual rate of 3.2%, helped along by consumer spending. And the evidence is now clear that new jobs will follow. And at a faster rate than in any recovery in recent memory.

The shift in employment activity is most apparent in job postings, which have begun to surge. Indeed.com, which collects job listings from thousands of sources, reported a 19 percent increase in postings in March, versus the same month last year.

Buffett controlled firms are also hiring again and he expects U.S. unemployment will now continue to fall as the economy improves.

"American business is improving, from everything I see now," he said. "At what rate unemployment will fall, I don't know, but it will fall."

Since the beginning of the year the U.S. economy has started to create more jobs than it is losing. Several reports due out this week will underscore those measurements. Most economists now agree that the largest economy in the world is now netting between 200,000 and 500,000 jobs monthly.