October’s durable goods, existing home sales

there were just a couple of widely watched reports released this week, with no releases on Thanksgiving or Friday….Tuesday saw the Existing Home Sales Report for October from the National Association of Realtors (NAR), and Wednesday saw the advance report on durable goods for October and the October report on new home sales, both from the Census bureau…in addition, Tuesday also saw the release of the Chicago Fed National Activity Index (CFNAI) for October, a weighted composite index of 85 different economic metrics, which rose to +0.65 in October from +0.36 in September, revised from the -0.17 that had been reported for September last month….that boosted the 3 month average of the CFNAI to +0.28 in October, up from a revised +0.01 in September, which indicates that national economic activity has been somewhat above the historical trend over those recent months….

October Durable Goods: New Orders Down 1.2%, Shipments Up 0.1%, Inventories Up 0.1%

the Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for October (pdf) from the Census Bureau reported that the value of the widely followed new orders for manufactured durable goods decreased by $2.8 billion or 1.2 percent to $236.0 billion in October, after September’s new orders were revised from the $238.7 billion reported last month to $238.8 billion, still 2.2% greater than August’s orders…year to date new orders are still 4.9% above those of 2016, down from the +5.2% year over year change we saw in this report last month….the volatile monthly change in new orders for transportation equipment was responsible for the drop, as new transportation equipment orders fell $3.5 billion or 4.3 percent to $77.1 billion, on a 18.6% decrease to $10,575 million in new orders for commercial aircraft….excluding orders for transportation equipment, new orders rose 0.4%, and excluding just new orders for defense equipment, new orders fell 0.8%….meanwhile, new orders for nondefense capital goods less aircraft, a proxy for equipment investment, fell $354 million or 0.4% to $66,172 million…

meanwhile, the seasonally adjusted value of October shipments of durable goods, which will be included as inputs into various components of 4th quarter GDP after adjusting for any changes in prices, increased by $0.3 billion or 0.1 percent to $241.0 billion, after September shipments were revised from from $240.5 billion to $240.64 billion, still up 1.0% from August…shipments of transportation equipment were down 0.5% on a 12.5% decrease in shipments of commercial aircraft, while a $0.3 billion or 1.5% increase to $19.9 billion in shipments of primary metals led the overall shipments increase…at the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the 15th time in 16 months, increasing by $0.5 billion or 0.1 percent to $404.1 billion, after September inventories were revised from $403.6 billion to $403.546 billion, still up 0.6% from August…a $0.1 billion or 0.4 percent increase to $33.9 billion in inventories of primary metals accounted for most of the increase, as transportation equipment inventories were statistically unchanged…

finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but volatile new orders, decreased for the third time in 4 months, falling fractionally by $0.5 billion to $1,134.6 billion, following a September increase of 0.2% to $1,135.1 billion, the same as what was previously reported…a $2.0 billion or 0.3 percent to $769.7 billion decrease in unfilled orders for transportation equipment was responsible for the decrease, as unfilled orders excluding transportation equipment orders were up 0.4% to $364,890 million…compared to a year earlier, the unfilled order book for durable goods is just 0.4% above the level of last October, with unfilled orders for transportation equipment still 1.3% below their year ago level, largely on a 2.0% decrease in the backlog of orders for commercial aircraft….  

Existing Home Sales Up 2.0% in October

the National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales rose by 2.0% from September to October, projecting that 5.48 million existing homes would sell over an entire year if the October home sales pace were extrapolated over that year, a pace that was still 0.9% below the annual sales rate projected in October of a year ago…September sales, now shown at a 5.37 million annual rate, were revised down from the 5.39 million annual rate that was indicated in last month’s report…the NAR also reported that the median sales price for all existing-home types was $247,000 in October, down fractionally from $247,600 in September but 5.5% higher than in October a year earlier, which they report as “the 68th straight month of year-over-year gains”…..the NAR press release, which is titled “Existing-Home Sales Grow 2% in October“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release…as sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell are included in GDP, except insofar as real estate, local government and banking services are rendered during the selling process…

since this report is entirely seasonally adjusted and at a not very informative annual rate, we like to look at the raw data overview (pdf), which gives us a close approximation to the actual number of homes that sold each month…this unadjusted data indicates that roughly 458,000 homes sold in October, down by 0.9% from the 462,000 homes that sold in September, and up by 2.9% from the 445,000 homes that sold in October of last year, so we can see that it was just a seasonal adjustment that caused the annualized published figures to show an increase……that same pdf indicates that the median home selling price for all housing types fell 0.2%, from a revised $247,600 in September to $247,000 in October, while the average home sales price was $288,400, down 0.4% from the $289,600 average sales price in September, but up 4.7% from the $275,500 average home sales price of October a year ago…regionally, average home sales prices ranged from a low of $225,100 in the Midwest to a high of $395,900 in the West, with only the West seeing average home prices rise by $2,100… for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following two posts from Bill McBride at Calculated Risk: NAR: “Existing-Home Sales Grow 2.0 Percent in October” and A Few Comments on October Existing Home Sales..

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)   

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