Weekly Economic Update 04-17-26: Existing Home Sales; Small Business Optimism; Producer Price Index; Home Builder Confidence; and Industrial Production

Small businesses and home builders soured on the economy last month, but strangely enough, producer prices didn't rise nearly as much as expected.

The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the views of the Georgia Institute of Technology or the Georgia Board of Regents.

I had the opportunity yesterday to attend the Barrett-Jackson Auto Auction in West Palm Beach, Florida. And if you are wondering, no, I did not purchase an automobile, although the temptation was ever present. I have wanted a classic muscle car for some time. However, I do not yet have enough subscribers to this weekly blog to afford such a thing, plus, I promised my wife that I would not come home with another car… this year. However, hope springs eternal, and there is always next year.

But as I spent the entire day yesterday looking at cars ranging from Bentleys, Lamborghinis, and Ferraris to Chevys, Fords, and Volkswagons, I couldn’t help but think about how the auction process is nearly a perfect example of the free market at work. I think Adam Smith would view auctions as an elegant manifestation of his “invisible hand” principle. He’d appreciate how they efficiently aggregate dispersed knowledge — buyers and sellers revealing true valuations through competitive bidding, with prices emerging organically rather than by decree.

Smith might note that auctions solve the “double coincidence of wants” problem that plagues barter, creating liquidity and price discovery where none existed. The competitive process ensures goods flow to those who value them most, maximizing societal welfare without central planning.

Of course, there could be collusion and information asymmetries — problems he recognized in The Wealth of Nations. The sellers have knowledge that the buyers may not, although there was ample opportunity for buyers to peruse the cars prior to any bidding.

My guess is that I was the only person at the South Florida Fairgrounds yesterday thinking this way, but hey…I am an economist after all. It is what I do.