New home Sales Rise in August; Durable Goods Orders Fall Back-to-Back

Sales of new one-family houses in August 2006 were at a seasonally adjusted annual rate of 1,050,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.1% above the revised July rate, the best showing since an 8% increase last March, but is 17.4% below the August 2005 estimate of 1,271,000.

But even with the increase, the median price of a new home fell to $237,000, a drop of 1.3% from August 2005. It was the first year-over-year price decline since late 2003. The average sales price of new houses sold in August 2006 was $304,400. The seasonally adjusted estimate of new houses for sale at the end of August was 568,000. This represents a supply of 6.6 months at the current sales rate.

Durable Good Orders:

Commerce Department reported that orders to U.S. factories for big-ticket manufactured goods fell for a second consecutive month in August, marking the first back-to-back declines in more than two years. Demand for durable goods dropped 0.5% last month to $209.7 billion, reflecting a big decline in orders for computers and other electronic products and for commercial aircraft.

Nondefense new orders for capital goods in August decreased $2.5 billion or 3.5% to $68.7 billion. Defense new orders for capital goods in August increased $0.5 billion or 6.1% to $9.5 billion.

Shipments of manufactured durable goods in August, up three of the last four months, increased $4.0 billion or 1.9% to $214.2 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 1.3% July decrease.

Inventories of manufactured durable goods in August, up seven of the last eight months, increased $0.7 billion or 0.2% to $287.1 billion. This followed a 1.1%  July increase.

Consumer Confidence:

The Conference Board index of consumer confidence for September rose to 104.5 compared with the 100.2 seen in August. 

Consumers' outlook for the next six months was less pessimistic in September than in August. Those anticipating business conditions to worsen decreased to 10.6% from 12.9%. Those expecting business conditions to improve, however, remained virtually unchanged at 16.3%. Consumer expectations for the state of economic activity over the next six months increased to 89.0 from 84.4 in August. 

The outlook for the labor market improved moderately. Those expecting more jobs to become available in the coming months edged up to 14.4 percent from 14.2 percent in August.

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