Wells Fargo's Weekly Economic & Financial Commentary- February 24, 2012

- Existing home sales rose 4.3% in January to a 4.57 million unit pace, although December sales figures were revised downward to show a 0.5% decline.

. Inventories of existing homes fell again in January to 6.1 months, although the downward trend is unlikely to continue given the backlog of foreclosures that should hit the market over the next few months due to the end of the moratorium on home foreclosures.

- New home sales pulled back slightly in January, declining 0.9% to a 321,000 unit pace, while the December data was revised upward to a 1.9% increase.

. The inventory of new homes fell to 5.6 months from 5.7 months in December, as builders have little incentive to begin new construction projects due to the price differential between new and existing homes.

- Initial jobless claims continued to trend downward last week, declining to 351,000, while the four-week moving average fell to 359,000, suggesting sustained declines in layoffs.