The National Association of Realtors reported today that sales of existing homes rose by 6.9 percent in March. This followed a jump of 5.9 percent in February, which was preceded by declines of 1.9, 1.7, 3.2, and 3.9 percent in the October-January period.

For many families, a home is the largest purchase they will ever make. Based on the existing-home sales data from the past two months, an increasing number of buyers are becoming sufficiently confident about their present and future financial situation to commit to such a purchase.

In other news today, the Labor Department reported that initial claims for unemployment insurance rose by 13,000 during the week ending April 20. This followed another rise of 9,000 in the preceding week.

To smooth out short-term fluctuations in the claims data, the Labor Department constructs a four-period moving average of the weekly data. This is obtained by adding up the last four weekly values and dividing by four. This week's four-week period is the first in recent weeks that does not overlap the period of the GM strike. And, not surprisingly, this week's average shows a drop off to 371,750 from last week's reading of 387,000. This marks the third straight week of decline in this indicator.

In the past I observed that the week-by-week plot of the four-week moving average data showed a pattern of increasingly higher relative highs and lows. In other words the data was in an uptrend. Well, that uptrend is still intact. But, this week's reading is approaching close to the level of the preceding relative low (363,750 on March 9). It will be interesting to see whether the four-week moving average falls below that level in the weeks to come.

Byline: Lafferty (MF Merlin)