Disappointing unemployment and housing data follow Fed’s vote of confidence in economy

Photo by Emile Wamsteker/Bloomberg via Getty Images.

Disappointing unemployment and housing reports released Thursday initially depressed stocks after Wednesday’s rally.

Initial claims for state unemployment benefits rose to 379,000 last week — almost a nine-month high, according to the Bureau of Labor Statistics. The rate of home re-sales fell to the lowest point in nearly a year and was the third straight monthly decline, according to the National Association of Realtors.
Wednesday’s tapering announcement sent the Standard and Poor’s 500 Index to a record 1,810.65 and the Dow Jones Industrial Average to a record 16,167.97 at the close of trading. Unlike earlier this year, when the threat of tapering spooked markets, Wall Street seemed to interpret the Fed’s gradual taper as a vote of confidence in the economy, especially after the unemployment rate dropped to 7 percent in November.

The difficulty of adjusting for seasonal volatility may account for some of Thursday’s disappointing unemployment data. According to the National Association of Realtors, rising mortgage rates and a smaller supply of housing have impacted affordability, especially for first-time buyers.

H/T Simone Pathe