Existing-Home Sales Rose in April

The National Association of Realtors said on Wednesday existing home sales advanced 0.6 percent to an annual rate of 4.97 million units, the highest level since November 2009.

The data underscored the housing market's improving fortunes as it starts to regain its footing. Resales were 9.7 percent higher than in the same period last year.

"It's quite supportive of the overall economy," said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. "It's a cushion against some of the other concerns in the economy."

Economic activity appears to have slowed somewhat early in the second quarter as the effects of higher taxes and deep government spending cuts have started filtering through.

Manufacturing, in particular, has been showing strains. But housing has held up surprisingly well, with the gains in home values helping to boost consumer confidence and retail sales.

The ripples from housing's recovery have also extended to the jobs market, with construction employment rising.

That should limit the degree to which the economy slows this quarter. It expanded at a 2.5 percent annual pace in the first three months of the year.

Tight supplies in some parts of the country have constrained the pace of home sales, but sellers are starting to wade back into the market, attracted by rising prices.

In April, the median home sales price increased 11 percent from a year ago to $192,800, the highest level since August 2008. It was the fifth consecutive month of double-digit gains.

With prices rising, more sellers put their properties on the market. The inventory of homes on the market rose 11.9 percent from March to 2.16 million.

SUPPLY STILL TIGHT

The increased inventory represented a 5.2 months' supply at April's sales pace, up from 4.7 months in March. It remained, however, below the 6.0-month level that is normally considered a good balance between supply and demand.

The market has been helped by monetary stimulus from the Federal Reserve that has kept mortgage rates near record lows. On Wednesday, Fed Chairman Ben Bernanke said a decision to scale back the $85 billion in bonds the Fed is buying each month could come at one of the central bank's "next few meetings" if the economy looked set to maintain momentum.

The housing report had little impact on U.S. financial markets, with traders focused on Bernanke's comments. The dollar rose to a near three-year peak against a basket of currencies, while prices for U.S. government bonds slumped.

Wall Street stocks fell, with the Standard & Poor's 500 index posting its biggest decline in three weeks.

Adding to signs that the housing recovery was becoming firmly established, distressed properties - which can weigh on prices because they typically sell at deep discounts - accounted for only 18 percent of sales last month.

That was the lowest since the Realtors group started monitoring them in October 2008. These properties, foreclosures and short sales, had made up 21 percent of sales in March.

In another bright sign, properties are selling more quickly. The median time on the market for homes was 46 days in April, down from 62 days the prior month. That was the fewest days since the NAR started monitoring that number in May 2011. Before the market collapsed in 2006, it usually took about 90 days to sell a home.

"While there are clearly a lot of interested buyers out there snapping up homes at a rapid clip, there do not seem to be enough homes on the market," said Omair Sharif, an economist at RBS in Stamford, Connecticut.

About 44 percent of all homes sold in April had been on the market for less than a month, while only 8 percent had been on the market for a year or longer.

Last month, first-time buyers accounted for 29 percent of the transactions, with investors buying 19 percent of homes. Investors, both individuals and institutions, are mostly buying homes for renting.

Sales were up in three of the four regions, falling 3.4 percent in the Midwest.

(Editing by Andrea Ricci and Dan Grebler)

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McDonald’s Reports Lower Sales in April

The company, which had warned of a decline last month, said same-store sales fell 0.6 percent globally. That reflected an increase of 0.7 percent in the United States, where it recently introduced its chicken McWraps.

But sales fell 2.4 percent in Europe, its biggest market by revenue. The company said it was seeking to improve results in the region by emphasizing “everyday affordability” and keeping stores open longer.

In the region encompassing Asia, the Middle East and Africa, sales were down 2.9 percent. The chain blamed the impact of the avian flu in China for the decline, as well as softness in Japan and Australia.

Yum Brands, which owns KFC and is China’s biggest Western fast-food company, has been hurt by the new strain of avian flu as well. It warned late last month that sales at established restaurants in China were down about 30 percent in April. Yum is also trying to recover from a controversy over its chicken suppliers that surfaced late last year.

After years of outperforming rivals, McDonald’s has been struggling to increase sales as it faces intensifying competition, changing eating habits and weak growth in the broader restaurant industry. Late last year, the company reported a decline in its monthly sales figure for the first time in nearly a decade. Soon after, the company ousted the head of its American division.

Sales at restaurants open at least 13 months is an important measurement because it strips out the impact of newly opened and closed locations.

McDonald’s, which has more than 34,000 locations around the world, noted that it had one fewer Sunday and one more Tuesday in April of this year compared with last April. The chain’s sales are generally stronger on weekends.

Service Industry Expanded in April, but at Slower Pace

WASHINGTON (AP) — A survey of United States service companies showed that the industry expanded at a slower pace in April than in March, as companies reported less business activity and could not raise their prices.

The Institute for Supply Management said on Friday that its index of nonmanufacturing activity fell to 53.1 in April from 54.4 in March. Any reading above 50 indicates expansion. The report measures growth in industries that cover 90 percent of the work force, including retail, construction, health care and financial services.

The decline in the overall index suggested that some service companies may be starting to see less consumer demand, in part because of higher Social Security taxes.

April’s weakness was largely caused by a steep drop in a measure of prices, to 51.2 from 55.9 in March. Nearly 70 percent of the companies surveyed said they did not change their prices last month, while 10 percent reduced them.

A measure of business activity also declined. Still, a gauge of new orders was mostly unchanged, and businesses stepped up restocking, typically a sign that they expect consumer spending to pick up.

Growth in the service industry depends largely on consumers, whose spending drives roughly 70 percent of economic activity. Americans increased their spending from January through March at the most rapid pace in more than two years, despite the increase in Social Security taxes that kicked in on Jan. 1.

And other trends may offset some of the impact of the taxes this year. Consumers have cut their debts. Rising home values and stock prices have increased household wealth And average gas prices nationwide have dropped 27 cents from their peak this year to $3.52 a gallon, according to AAA.

In manufacturing, orders fell 4 percent in March, the largest amount in seven months, but a crucial category that signals business investment plans increased. The drop in factory orders reflected a plunge in the volatile category of commercial aircraft, the Commerce Department reported on Friday. Orders were up 1.9 percent in February. But in core capital goods, a category considered a proxy for business investment plans, orders rose 0.9 percent after a 4.8 percent decline in February and a 6.7 percent surge in January.

Weaker economies overseas and the impact of across-the-board government spending cuts have made businesses more cautious, dampening demand for manufactured goods. But even with the March decline, total orders stood at $467.3 billion, 43 percent above the recession low in March 2009.

Trucks Help Detroit Carmakers Post a Strong April

DETROIT — American automakers said Wednesday that sales of pickup trucks rose sharply in April because of a revival in the housing market and increased demand from the oil and gas industry.

The increase in truck sales fueled double-digit sales growth at all three Detroit automakers and kept the industry on track to sell more than 15 million vehicles this year.

Auto analysts said the overall industry sold about 1.3 million new vehicles during April, a 10-percent improvement over the same month a year ago. It was the best April performance since 2007 and another indication that sales of new cars and trucks in the United States were returning to pre-recession levels.

“As long as automakers keep reporting their best sales in at least five years, we’ll continue to be in good shape,” said Jessica Caldwell, an analyst with the auto-research site Edmunds.com.

Auto executives said pickup sales grew three times as much as the overall market during the month and were a direct result of improved housing starts and strong demand for trucks by the energy sector.

The biggest beneficiary was the Ford Motor Company, the second-largest American automaker, which reported it sold 212,000 vehicles during the month, an 18-percent gain from a year ago.

Ford, which recently reported record first-quarter profits in North America, said sales of its F-Series pickup increased 24 percent in April to 59,000 vehicles.

“F-Series continues to lead the pace in the truck industry,” said Ken Czubay, Ford’s head of sales and marketing in the United States. “We are building as many as we can.”

Ford reported impressive gains across its lineup, with sales of the Escape S.U.V. up by 52 percent and the Fusion sedan up 24 percent. Even its struggling Lincoln luxury brand had a 20-percent improvement because of strong sales of the new MKZ sedan.

General Motors, the largest of the domestic automakers, said it sold 237,000 vehicles during April, an 11-percent improvement from a year ago. Cadillac had the best performance of G.M.'s four brands, recording a 34-percent gain primarily from sales of its new ATS compact sedan and large XTS model. G.M. also reported big gains on the truck side, as sales of its Chevrolet Silverado pickup increased 28 percent to 39,000 vehicles.

Chrysler, the smallest of the Detroit companies, said it sold 156,000 new vehicles during April, an 11-percent increase from a year ago and its 37th consecutive month of year-over-year sales gains. The Ram pickup led the way with a 49-percent gain from a year ago. Chrysler also enjoyed strong performances by its profitable S.U.V. models, with sales of the Dodge Durango up 65 percent and the new Jeep Grand Cherokee up 27 percent.

All three Detroit automakers gained market share during April and should sustain that momentum with new products arriving this summer.

Among Japanese automakers, growth has slowed since their big comeback last year from inventory problems associated with the earthquake and tsunami in Japan in 2011. Toyota, the largest Japanese auto company, said its United States sales fell 1 percent during April. The company is preparing to bring out several new models, including fresh versions of it Lexus luxury cars.

Of the European automakers, Volkswagen reported that it sold 33,000 new vehicles during the month, which was a 10-percent improvement from a year ago. VW is rapidly expanding in the United States and relying on North American results to compensate for weaker sales in the sliding European market.

Business Hiring Slipped to 7-Month Low in April

Businesses added 119,000 employees to payrolls last month, according to the ADP National Employment Report released on Wednesday, short of economists’ expectations for 150,000 jobs and the smallest gain since last September.

The slowdown in hiring was caused primarily by a combination of increased payroll taxes at the start of the year and the $85 billion in government spending cuts that took effect across the board in March, said Mark Zandi, chief economist at Moody’s Analytics, which jointly developed the hiring report with ADP, a payroll processor.

“They are starting to bite and starting to weaken growth,” Mr. Zandi said. “It’s affecting all industries and almost all company sizes.”

The Federal Reserve also expressed its concern about economic growth on Wednesday and said it would continue to pursue its stimulus campaign, although it was ready to increase or decrease its efforts depending on the economy’s performance.

After accelerating in the first quarter, recent data suggested that overall economic growth cooled heading into the second quarter.

Two separate reports on manufacturing also showed employment slowed in April. Analysts said there was some risk that the federal April employment report on Friday could be disappointing.

Markit, a financial data firm, said its final Manufacturing Purchasing Managers Index slipped to 52.1 from 54.6 in March. It was the lowest reading since October.

That was echoed by a separate report from the Institute for Supply Management that showed the sector expanded only modestly, with its index coming in at 50.7, down from 51.3. Readings above 50 indicate expansion.

Regional reports also showed a slowdown in factory activity in April in some areas while some, including the Midwest, fell into contraction.

Another report showed construction spending fell 1.7 percent to an annual rate of $856.72 billion, the lowest since August, according to the Commerce Department. The drop could cause the first-quarter economic growth estimate to be trimmed from a first reading of 2.5 percent.

Economists expect Friday’s employment report from the Labor Department to show that overall nonfarm payrolls increased by 145,000, an improvement over the paltry 88,000 seen in March. Private payrolls are expected to have risen by 160,000.