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Weekly Economic Update: May 22, 2023

Presented by Nicholas Wealth Management

More Housing Sector Softness: Sales of existing homes declined for the second straight month in April, falling 3.4% from the prior month, according to the National Association of Realtors. Versus the prior year, April's seasonally-adjusted annualized rate (SAAR) of 4.28 million sales was 23% lower. Sales have now declined for 20 consecutive months on a year-over-year basis. Related, the U.S. Census Bureau reported last week that the SAAR of housing starts in April was 1.401 million, 22.3% lower than the prior year's pace. Fewer starts were seen across both single-family homes and apartments, down 28% and 12%, respectively, versus last year. Downward Trend in Leading Economic Indicators Persists: The Conference Board announced last week that its Leading Economic Index (LEI), a composite of ten U.S. economic indicators intended to signal turning points in the economy, fell 0.6% in April from the prior month. This was the 13th consecutive monthly decline in the index. Of various index components, stock prices and manufacturers' new orders for both capital and consumer goods improved in April, but all other components declined. Based on trends in the index, The Conference Board forecasts that economic activity will contract starting in Q2 of this year. Retail Sales Stem Recent Decline: U.S. retail sales rose 0.4% in April versus the prior month, according to data reported last week from the Department of Commerce. This was the first monthly increase after two consecutive months of declining sales. Product categories seeing increases in April included autos, restaurants, home improvement, and online purchases, while consumers cut spending on gasoline and big ticket purchases. Compared to April of last year, sales rose only 1.6% (including the effect of price increases), the slowest annual pace since May 2020. Source: Gallagher Insurance, Risk Management and Consulting