New home sales and durable goods orders were up sharply although as you shall see there is less there than meets the eye.
I always find this number to be about the clunkiest and least reliable of the government statistics. Today’s numbers prove my point.
Overall orders for durable goods in July were up 4.9% to $168.43 billion. They had fallen in June by an initially announced 2.2% but that was revised to a decline of 1.3%. In July the transportation sector was up 14.4% driven by a 107.2% increase in commercial aircraft orders — see what I mean. Excluding transportation they were up 0.8%.
This chart from Jake at EconomPicData.com breaks down the sectors.
New Home Sales
Also ranking right up there on the unreliability scale is the new home sales report. The Census Bureau said that sales of new homes in July came in at 433,000 up 9.6% from the 395,000 figure for June but 13.4% below the July 2008 figure. They peg inventories at 271,000 which based on the current sales figures represents 7.5 months of supply.
I report these numbers mostly out of a sense of duty. Also news is slow right now so why not. I find it hard to read too much one way or the other into either report, save for the inventory part of the home sales number. It has dropped significantly and absent much new construction is getting down to normal levels. I think that inventory of both new and existing homes is going to be crucial. Both have been falling and that’s a real positive. The inventory number is what you need to focus on.