New Home Sales Jump
New home sales rose 1.9% in August, but July sales was revised sharply lower, to a 977,000 annual pace from the 1,014,000 initially reported. The August level of 996,000 was a record high and above the consensus of 980,000.
Sales rose in the West and South, were flat in the Midwest, and fell in the Northeast. Sales were up 14.4% from a year ago. The inventory of homes for sale rose to 332,000 from 331,000, a tight four-month supply. The median home price rose to $175,300 from $172,500 in July.
The data contradict the 1.7% drop seen in existing-home sales in August, showing that housing remains strong, although possibly topping out. The data are not likely to have much impact on the Federal Reserve.
Durable Goods Orders Fall 0.6%
Orders for durable goods -- items meant to last three years or more -- fell 0.6% in August, less than expected, after the 8.6% July jump.
Excluding defense, orders were up 0.6%. Orders were up 4.1% from a year ago. Shipments fell 1.3% after a 3.3% July increase, and remain up 0.3% on the year. A 47.3% rise in orders for civilian aircraft was a major factor in the 5.9% rise in nondefense capital goods orders; excluding aircraft, they were up 0.6%.
The data were stronger than expected, suggesting worries about the manufacturing sector may be overdone. The report also points out the growing influence of defense orders, up 49.6% from a year ago; excluding defense, orders are up 2.7%.