Bill Losey’s Weekly Economic Update for May 23, 2011

HOME SALES, HOUSING STARTS SLIP
Existing home sales decreased 0.9% in April, according to the National Association of Realtors. Annually, sales were off 12.9% from the pace of April 2010 (back when the homebuyer tax credit was in effect). The national median existing home price last month was $163,700, 5.0% below where it was a year before. The inventory of unsold residences increased to a 9.2-month supply, up from an 8.3-month supply in March. A new release from the Commerce Department said housing starts declined by 10.6% in April; building permits decreased by 4.0% last month.

CONFERENCE BOARD LEI INDEX DECLINES
The CB’s Leading Economic Index retreated in April for only the second time since March 2009. The 0.3% slip came after the index rose 0.7% in March and 0.9% in February. On the bright side, the CB’s coincident (i.e., current) economic index improved for the third straight month in April.

GOLD GETS BACK ABOVE $1,500; GAS PRICES FALL
On Friday, gold prices topped the $1,500 level for the first time since May 12 – the settlement price on the COMEX was $1,508.90 an ounce, concluding a 1.0% advance for the week. Silver pulled off a 0.3% gain last week to settle Friday at $35.09 an ounce. Crude oil fell 0.2% on the week; retail gas prices decreased by almost $0.10 last week, according to AAA’s Fuel Gauge Survey.

STOCKS RETREAT ON INDICATORS, DEBT ISSUES
Investors were largely left cold by this week’s economic reports, and anxieties over the debt of Spain and Greece also affected Wall Street. So, all three major U.S. indexes moved south. On the week, they performed like this: DJIA, -0.66% to 12,512.04; S&P 500, -0.77% to 1,333.27; NASDAQ, -0.71% to 2,803.32. In 2011, we are seeing selling in May: the DJIA and S&P 500 are currently on three-week losing streaks.