Economy Watch: New Home Sales, Total Vehicle Miles Dip; No Conclusive News from Jackson Hole
- Aug 26, 2013
Sales of new single-family houses in July 2013 were at an annualized rate of 394,000 units, according to the Census Bureau on Friday. That’s a 13.4 percent drop compared with June, when the annualized rate was 455,000 units, but it’s still 6.8 percent higher than July 2012.
The total came in lower than expected, but that might be a function of intermittent volatility, rather than the beginning of a slide in new home sales. The report also stated that over the first seven months of 2013, 271,000 homes were sold. That’s a spike of 21.5 percent compared with the first seven months of 2012, when 223,000 new homes were sold.
Also, inventories are still low. The bureau’s estimate of new houses for sale at the end of July was 171,000 units, which represents a supply of 5.2 months at the current sales rate. The median sales price of new houses sold in July 2013 was $257,200, and the average sales price was $322,700, according to the bureau’s reckoning.
Total Vehicle Miles Down
The U.S. Department of Transportation reported on Friday, in an indirect measurement of economic activity, that travel on all roads and streets dropped by 0.4 percent for June 2013 compared with the same month last year, or about 900 million vehicle miles. Travel for the month is estimated to be 258.1 billion vehicle miles.
Miles driven used to rise consistently. From the early 1970s to 2007, when the 12-month trailing total peaked at just over 3 trillion vehicle miles, representing a tripling of the total over nearly four decades. With record-high gas prices in the summer of 2008, and then the recession, 12-month trailing totals for vehicle miles have hovered consistently below 3 trillion miles since then.
The number of miles driven is also affected by gas prices, which were fairly high in July, though they’ve been tapering off since then. According to AAA on Sunday, the current average nationwide is $3.541 per gallon of regular, compared with $3.648 a month ago (and $3.743 a year ago).
No Conclusive News from Jackson Hole
Various Federal Reserve officials concluded their annual conference in Jackson Hole, Wyo., on Saturday, with one of the main – if not the main – topic of discussion being the immediate future of QE3. Despite the meeting, the schedule for tapering remains uncertain. Some financial panjandrums seem to favor an early beginning to tapering, as early as next month, while others seem to believe that the economy, particularly employment, isn’t quite strong enough for lessen the perceived need for $85 billion a month in bond purchases by the Fed to keep interest rates low.
Wall Street had an up day on Friday, perhaps because the housing data seemed to show that the recovery isn’t robust enough for the Fed to wind QE3 down. The Dow Jones Industrial Average was up 19.08 points, or 0.52 percent. The S&P 500 advanced 0.31 percent and the Nasdaq, which didn’t suffer any trading hiccoughs, gained 0.39 percent.