Sept. data: Durable goods up, new home sales down
In seemingly conflicting data out this morning, orders for durable goods -- big-ticket items, like refrigerators -- rose 1 percent in September while new home sales fell 3.6 percent.
But a dig into the numbers should eradicate the mystery. First, the housing number.
Forecasters expected new home sales in September to hit an annual rate of 440,000. Instead, the number came in at 402,000. Forecasters were surprised by the actual number, but I'm having a hard time figuring out why. The $8,000 first-time homebuyer credit expires at the end of next month, unless Congress acts to extend it. That's simple math. Take away the credit, take away sales.
Sales of existing homes have been up, but only at the low end. No one's buying houses that cost more than $250,000. If you take away the credit, people will stop buying houses less than $250,000, as well.
On durable goods, the September number is up, but it's not part of a consistent trend.
Orders for airplanes and autos (cash-for-clunkers hangover) actually fell last month, but a big surge in orders for machinery pushed the total number up, indicating a rebound in manufacturing.
However, September's 1 percent rise in orders follows a 2.8 percent decline in August and a 4.8 rise in July. So it's hard to draw any kind of straight line out of this data, or draw any solid conclusions about recovery.
-- Frank Ahrens
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October 28, 2009; 11:25 AM ET
Categories: The Ticker | Tags: durable goods, home sales
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