More Home Sales data

As I expected the new home sales data for Aug came in weak, falling 8.3%. New Home sale prices (median) were down 7.5%. This is arguably a better reflection of the types of price declines that will be needed in order to bring the market into balance. The idea is that home builders will not want to hang onto their inventory nearly as long as existing home owners, so they will cut their prices faster.

Better news came from the job front in the form of initial claims data. Initial claims data is a weekly measure of the amount of people who initiate a claim for unemployment insurance. The amount of people initiating such a claim fell to 298k. This suggests that the Aug labor report, which showed a 4k drop in unemployment may have been an aberration.

Now you can see the difficulty in conducting monetary policy.