The National Association of Realtors reported that existing home sales grew +3.6% in December, recovering from a -1.7% drop in November to a seasonally adjusted annual rate of 5.54 million, up +10.8% from December 2018. Sales for all of 2019 totaled 5.34 million, matching 2018’s sales level, with sales decreases in the West (-1.8%) and Midwest (-1.6%) offsetting sales increases in the South (+2.2%). Homes prices continued to rise for the 94th consecutive month of yearly gains, with December’s median sale price increasing +7.8% Y/Y to $274,500. Unsold inventory fell for the 7th straight month to a 3.0 month supply, down from 3.7 months in December 2018.

The Conference Board’s report on Leading Economic Indicators (LEI) for the US showed a -0.3% decline for December, and has declined for 4 out of the last 5 months. In the second half of 2019 the six-month growth rate declined by -0.4%, reversing its +0.5% growth rate for the first half of the year. Positive contributions to the LEI included increasing stock prices, favorable consumer expectations for business conditions, and increases in manufacturers’ new orders for consumer goods, and negative contributions included increases in initial unemployment claims, drops in the Institute for Supply Management’s New Orders Index, and drops in building permits. The report projected that economic growth would continue at around +2% in early 2020.

January’s IHS Markit Purchasing Managers’ Index for Manufacturing fell -0.7 to a three month low of 51.7, but the Services index rose +0.4 to a ten month high of 53.2, and the Composite index rose to a ten month high of 53.1 (+0.4). Service providers increased their workforce, and while their optimism for improving business conditions reached a seven-month high, confidence continued to remain below the series tend. In manufacturing, new business growth was marginal due to softening demand, but the manufacturing workforce continued to expand allowing order backlogs to fall for the first time in four months. Input price inflation increased in services, leading to a modest pace of increase for service output charges, while manufacturing price pressures eased, leading to only a fractional increase in manufacturing output charges.