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Latest '06 Economic Reports Lackluster, But A Big Q1 Bounce Expected After Q4.(A)

Investor's Business Daily

| March 01, 2006 | COPYRIGHT 2006 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: KIRK SHINKLE

A slew of disappointing reports Tuesday for housing, factories and consumer sentiment offset a solid revision to fourth-quarter growth.

Existing-home sales hit a two-year low, while consumer optimism fell to a three-month trough. Chicago-area factories felt the sting of a weak auto sector.

Home resales fell for a fifth straight month in January to a 6.56 million annualized rate, led by big declines in the frothy condo market, said the National Association of Realtors.

That follows Monday's report of a 5% drop in new-home sales.

Such weakness, despite the warmest January weather in more than a century, pushed inventories of unsold homes to record levels.

Existing-home prices still posted double-digit gains vs. a year earlier, but most analysts expect that to cool in the coming months.

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