The U.S. trade deficit in goods widened to a new high in December, sales of new single-family homes were up nearly 12%, and refinancing activity sank even more, reports showed Wednesday.
Here’s a quick look at the most significant economic indicators of the day and what they tell us.
International Trade in Goods
- The U.S. imported $101 billion more goods than it exported in December, the biggest trade deficit for any month since at least 1992, according to preliminary data from the Census Bureau. It’s also the first time it’s broken the $100 billion threshold. (It widened from $98 billion in November.)
- The widening deficit reflects the scale of consumer demand for goods in the pandemic, combined with domestic supply shortages, economists said. Some expect the deficit to get worse in the first quarter but then improve later in the year if virus cases recede and consumers shift their spending away from goods.
New Residential Sales
- Homebuilders were busy in December, according to the Census Bureau’s monthly report on new residential sales. Sales of new single-family houses rose 11.9% from November to a seasonally adjusted annual rate of 811,000, beating the expectations of forecasters. It was the fastest clip since March.
- More homebuilding is welcome news for prospective buyers with few choices. There were a record low number of existing homes for sale in December.
- The volume of refinancing applications across the country fell for the fourth straight week, dropping 13% last week, according to the latest data from the Mortgage Bankers Association. It’s now 53% lower than this time last year.
- Refinancing is losing its appeal because of recent increases in mortgage rates, which hit record lows within the last year or so. The group’s measure of mortgage rates showed a conventional 30-year mortgage averaged 3.72% last week—up from 2.95% a year earlier.
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