New Home sales Tumble 15.1%
This is real big mixed bag of stats...>Maybe a trick bag>>
Durable-Goods Orders Surge 3.3%,
Posting Biggest Gain in Six Months
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
WASHINGTON -- Sales of new, single-family homes tumbled 15.1% last month, the largest percentage drop in nine years, as the red-hot housing market cooled down from its record pace in December.
Other reports Thursday gave a mixed reading on the economy. Orders to U.S. factories for big, costly items jumped 3.3% in January, but a weekly jobs report showed more Americans filing for unemployment insurance.
The trio of reports provided further evidence of what economists say is an economic recovery that is advancing, but in fits and starts. "All the reports indicate a continued mixture of economic activity," said Peter Kretzmer, an economist at Bank of America.
The housing report was jarring. New-home sales dropped to a 914,000 annual rate, the Commerce Department reported. Economists had forecast only a 3.4% drop in sales to a 1.045 million annual rate.
But the big slide hasn't knocked housing off its perch. Sales are still at lofty levels and the sector undoubtedly remains the economy's hottest, especially with mortgage rates still sitting at a historical low. Earlier this week, the National Association of Realtors said sales of previously owned homes -- the biggest chunk of the housing market -- hit a record high in January.
The government revised its estimate of December new-home sales to a 4.1% increase from the previously reported 3.5% gain. November sales, however, were revised down to a 3.4% gain from a 3.9% increase.
The inventory of homes on the market rose to a more than two-year high of 4.5 months' supply in January from 3.8 months' supply in December.
Sales fell sharply in all parts of the country last month except for the Northeast. Sales plummeted by 42% in the Midwest, and fell 13% in the South. But in the Northeast, sales soared nearly 44%.
Durable-Goods Orders Surge
Earlier Thursday, the Commerce Department said orders for durable goods, or items meant to last for at least three years, climbed to $174.78 billion last month. It was the largest increase in six months and a sign that the battered manufacturing sector may be turning a corner.
Economists weren't sure what to expect with the durable-goods report. A consensus pegged orders at a 1% increase, but some forecasts had them up as much as 6.5%. The 3.3% increase reversed a revised 0.4% decline in December -- initially estimated as a 0.2% slide -- and a 1.2% stumble in November.
The manufacturing sector, hardest hit by the 2001 recession, has been the biggest drag on the economy's push to get back to full throttle. But Thursday's report, along with other data, offered hope the sector may see better days ahead. The Institute for Supply Management earlier this month said its index of manufacturing activity rose for a third straight month.
The increase in durable-goods orders last month were broad-based, with transportation products up 5.1% and automobiles surging 10.7%. When stripping out transportation-product orders, which can swing widely each month, durable-goods orders rose by a strong 2.5%, the best showing since July.
Defense capital-goods orders were down 2.3%, while orders for defense aircraft and parts fell 7%. If defense orders are excluded, overall durable-goods orders rose 3.6%.
At the very least, the report showed businesses are spending. Orders for computers rose 1.5%, and orders soared 46% for communications equipment, a segment that has been hit hard in the past. Orders for electrical equipment and appliances rose 0.8%. Machinery orders rose 5.3% and orders for primary metals, including steel, grew 4.2%.
James Glassman, an economist at J.P. Morgan, said the best news out of the durable-goods report was the strong rise in capital spending. But he cautioned that businesses and consumers are still wary over the situation in Iraq and could hold back their spending in the coming months.
Inventories of durable goods edged back down 0.1% after posting their first increase in nearly two years in December. Durable-goods shipments, meanwhile, climbed 3.5%. Unfilled orders fell 0.2%.
Jobless Claims Rise Unexpectedly
In a third report Thursday, the Labor Department said initial jobless claims rose by 11,000 to 417,000 in the week that ended Saturday. That marked the second consecutive gain and it raised the four-week average -- a more stable measure -- by 4,000 to a seven-week high of 399,750 claims.
A government spokesman said the numbers didn't appear to reflect the blizzard along the East Coast and the Presidents Day holiday last week, which many thought would have sidelined filers and reduced the number of claims. Economists, noting those factors, expected only 390,000 claims.
The Labor Department also revised its estimate of initial claims for the prior week, raising it by 4,000 to 406,000. Revisions of the volatile data are common, and it is difficult to judge whether the job market is fully recovering by looking at the weekly data.
The increase last week put claims at a two-month high, and stole some of the thunder from those who thought the job market was picking up steam. Nearly two million Americans have lost their jobs over the last two years, and the weak economy has made businesses reluctant to hire workers. |
