There is good news this week. First, initial claims for unemployment insurance dropped to 339,000 claims last week, and it is down from 369,000 claims the previous week. This is a marked improvement from the levels of the past several months. The number was 15.7% below a year ago and 8.1% lower than a week ago. The four-week moving average is 9.8% below a year ago and 3.1% below a week ago. At least this indicator is now moving in the right direction. The other pleasant surprise was in the University of Michigan Consumer Sentiment Index. It jumped to 83.1 (preliminary) in October. This is up from 78.3 in September and higher than the consensus expectation of 78.5. While still very low by historic standards, at least there is finally some improvement.

In other news, the consensus forecast of U.S. economic growth for 2012 and 2013 slipped a bit over the past month according to the October survey. The downward adjustment in the consensus forecast of GDP growth this year resulted from a recent downward revision in the government’s latest estimate of growth in the second quarter coupled with consensus expectations of somewhat softer than previously expected growth in the final quarter of 2012. The drop in the consensus forecast of GDP growth in 2013 likely resulted from increasing concern about the “fiscal cliff”. In any event, the forecasts were only modestly lower in both cases. Expectations, though, continue to point to a continuation of the mediocre rates of growth that we have experienced in this recovery.

As for Arizona, weekly unemployment claims now stand 34.9% below year earlier levels and are down 4.4% in September relative to August. Total claims were 73,791 in September, 2012. In Greater Phoenix, total residential listings stood at 21,703, down 19.5% from a year ago. Total homes sold for the month was 6,478, down 17.9% from a year ago. The median price of sold homes in September, 2012 was $150,000. This is up over 30% from a year ago.
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