Economy Watch: New Home Sales Down in November
Single-family sales dip in November, while durable goods orders surge 3.5 percent. More good news comes from The Federal Reserve Bank of Philadelphia, which reports that its coincident indexes for November increased in 46 states.
By Dees Stribling, Contributing Editor
The Census Bureau reported on Tuesday that nationwide sales of new single-family houses in November were at an annualized rate of 464,000 units. That’s 2.1 percent below the October rate of 474,000, but 16.6 percent above the November 2012 rate.
Despite the small drop in November, new home sales are at their highest level since 2008. Even so, new home sales are still historically low. Even back in the early 1960s, when the federal government first started tracking new homes sales, the rate hovered around 600,000 units. That was for a nation with a population of about 179 million; the current U.S. population is about 316 million.
The total number of houses for sale at the end of November was 167,000, which represents a 4.3 months’ supply at the current sales rate. That’s in the normal range, which is less than six months’ supply. During the worst of the recession, the supply spiked to over 12 months. The Census Bureau considers a house for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in non-permit areas.
Durable Goods Orders Jump in November
Durable goods orders surged 3.5 percent in November, partly on the strength of businesses pumping up their inventories, the U.S. Department of Commerce reported on Tuesday. Unlike monthly increases that are fueled mainly by one class of durable goods—such as aircraft orders—November’s increase was fairly broad, including aircraft, but also computers, electronics, and other machinery.
Transportation equipment orders gained 8.4 percent for the month. Non-defense aircraft and aircraft parts orders, which form a subset of transportation equipment that tends to be volatile, were up 21.8 percent for the month. Excluding transportation equipment, new orders were up 1.2 percent for the month. That follows two relatively small monthly increases in non-transportation durable goods orders.
Most State Coincident Indexes Up
The Federal Reserve Bank of Philadelphia reported on Tuesday that its coincident indexes for November 2013 increased in 46 states, decreased in two states (Alaska and Ohio), and remained stable in two others (New Hampshire and Washington). Over the past three months, the indexes increased in 46 states, decreased in three, and remained stable in one.
The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four indicators are non-farm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index.
Wall Street had an up day on Tuesday, which was a shortened trading day ahead of Christmas, with the Dow Jones Industrial Average gaining 62.94 points, or 0.39 percent. The S&P 500 advanced 0.29 percent and the Nasdaq was up 0.16 percent. Things continued to look up on Thursday mid-morning, with the Dow up 63.7 points, or .39 percent; the S&P 500 up 5.36 points, or .29 percent; and Nasdaq up 13.39 points, or .32 percent.