US new homes sales likely recovered in April, advance goods balance expected to have widened

US new home sales are expected to have increased in April. Newly built homes are likely to have increased at a seasonally adjusted annual rate of 1.8% to 520,000 in April, noted Societe Generale in a research report. This might bring the new residential construction sales to the levels seen in December-January that were the highest since 2008, added Societe Generale. But a fall of two points in the current sales component of NAHB housing market index suggests that buying of new homes will be averted.

Meanwhile, the US advance goods balance is expected to have broadened in April. According to Societe Generale, the advance goods balance might have broadened by around USD 3.2 billion to USD 60.1 billion in April, after unexpectedly narrowing to –USD 56.9 billion in March that was possibly due to residual impacts of the Chinese Lunar New Year.

A sharp increase in February’s consumer goods imports was entirely reversed in March that resulted in narrowing of the goods deficit by a larger amount. Hence consumer goods are likely to normalize in April, added Societe Generale. Moreover, US crude oil imports declined 408 kb/d in April, but unit prices rebounded by around USD 1.50, possibly countering the two effects.