US data reviewed and GDP Q1 tracker boosted to 1.3% - Nomura

Analysts at Nomura offered a review of the recent US data and outlook for Q1 GDP.

Key Quotes:

"Initial jobless claims: Initial jobless claims for the week ending 18 March increased by 15k to 258k. The four-week moving average was steady at 240k. Continuing claims fell 39k to 2000k for the week ending 11 March. The release today includes annual revisions for initial and continuing jobless claims. The seasonal adjustment factors used for claims data from 2012 forward have been revised, but there was no meaningful change to an underlying trend. As labor market conditions remain healthy, we continue to expect this series to remain low. 

New home sales: New single home sales increased stronger than expected in February, up 6.1% m-o-m, pushing up the annualized pace to 592k (Nomura: +0.5% to 565k, Consensus: +1.6% to 564k). The prior months from November 2016 and January 2017 were all revised upwards. The strong increase in new home sales appears consistent with single family building permits that increased strongly from January to February and elevated readings of NAHB sales of single family homes index, pointing to healthy housing market activity. The supply of new homes for sale increased slightly, but the months supply indicator declined to 5.4 from 5.6 as the sales increased strongly. In addition, it appears that the supply of affordable single home for sale declined. The median new home price fell 4.9% y-o-y but mean price increased strongly by 11.7% y-oy, pointing to worsening affordability of newly built single home for sale. 

Q1 GDP tracking update: The stronger-than-expected increase in February and the upward revisions in the past months point to stronger residential investment in Q1. We are raising our Q1 GDP tracking estimate by 0.1pp to 1.3% from 1.2%."