December durable goods, January existing home sales

The only widely watched reports that were released this past week were the Advance Report on Durable Goods for December from the Census Bureau and the Existing Home Sales Report for January from the National Association of Realtors (NAR)…the December advance report on durable goods had originally been scheduled for January 15th, and was delayed till February 21st due to the government shutdown, while the privately issued existing homes sales report was obviously unaffected…during most Februarys, we would have normally seen a New Residential Construction report for January by this date; however, the December New Residential Construction report originally scheduled for January 17th has yet to be published and is now rescheduled for February 26th, so it appears we remain more than a month behind…

Other than the aforementioned reports, this week also saw the release of the Philadelphia Fed February Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, who reported their broadest diffusion index of manufacturing conditions fell to -4.1 in February from a reading +17.0 in January, the largest drop in their survey since August 2011, and the index’s first negative reading since May 2016, indicating a small plurality of that region’s manufacturing firms reported a slowdown in their manufacturing activity this month..

December Durable Goods: New Orders Up 1.2%, Shipments Up 0.8%, Inventories Up 0.2%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for December (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods rose by $3.0 billion or 1.2 percent to $254.4 billion in December, after November’s new orders were revised from the $250.8 billion reported two months ago to $251.5 billion, now 1.0% more than October’s new orders…for the year, 2018’s new orders were 8.1% above those of 2017, an increase from the 5.8% year over year change this report indicated for 2017….an increase in the volatile monthly new orders for transportation equipment was largely responsible for the December increase, as new transportation equipment orders rose $2.8 billion or 3.3 percent to $90.2 billion, on a 17.3% increase to $15,053 million in new orders for commercial aircraft….excluding orders for transportation equipment, other new orders just rose 0.1%, while excluding just new orders for defense equipment, new orders rose 1.8%….however, new orders for nondefense capital goods less aircraft, a proxy for equipment investment, fell $462 million or 0.7% to $68,502 million…

Meanwhile, the seasonally adjusted value of December shipments of durable goods, which will be included as inputs into various components of 4th quarter GDP after adjusting for changes in prices, increased by $2.1 billion or 0.8 percent to $259.7 billion, after the value of November shipments was revised from from $256.7 billion to $257.6 billion, now up 1.0% from October…shipments of transportation equipment, up $1.4 billion or 1.5 percent to $91.4 billion, led the increase, on a 1.8% increase to $62,097 million in shipments of motor vehicles….meanwhile, shipments of nondefense capital goods less aircraft rose 0.5% to $69,239 million, after November’s capital goods shipments were revised fractionally lower…for the year, shipments of durable goods were valued 7.3% greater than those of 2017…

At the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the 23rd time in the past 24 months, increasing by $0.9 billion or 0.2 percent to $414.7 billion, after November inventories were revised from $412.8 billion to $413,852 million, now up 0.4% from October….a 1.1 percent increase to $36,623 million in inventories of primary metals was the largest percentage inventory increase, while a 2.4 percent decrease to $12,915 million in inventories of defense aircraft was the largest percentage decrease…

Finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but obviously volatile new orders, decreased for the third month in a row, falling by $1.149 billion or 0.1 percent to $1,180.1 billion, after unfilled orders for November were revised from $1,181.7 billion to $1,181.274 billion, now a 0.2% decrease from October…a $1.151 billion or 0.1 percent decrease to $811.1 billion in unfilled orders for transportation equipment was responsible for the decrease, as unfilled orders excluding transportation equipment orders were statistically unchanged at $369,028 million…compared to the end of 2017, the unfilled order book for durable goods at the end of December was 3.8% above the level of the prior year end, with unfilled orders for nondefense capital goods less aircraft 2.1% above their year ago level..   

Existing Home Sales Fell 1.2% in January

The National Association of Realtors (NAR) reported that existing home sales fell by 1.2% from December to January on a seasonally adjusted basis, projecting that 4.94 million existing homes would sell over an entire year if the January home sales pace were extrapolated over that year, a pace that was also 8.5% below the annual sales rate projected in January of a year ago…December home sales are now shown to have been running at a 5.00 million annual rate, revised up from the 4.99 million annual rate indicated by last month’s report…the NAR also reported that the median sales price for all existing-home types was $247,500 in January, 2.8% higher than in January a year earlier, which they report as “the 83rd straight month of year-over-year gains“…..the NAR press release, which is titled “Existing-Home Sales Drop 1.2 Percent in January“, 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 read about 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 usually look at the raw data overview (pdf) to see what actually happened during the month…this unadjusted data indicates that roughly 285,000 homes sold in January, down by 24.4% from the 377,000 homes that sold in December, and down 8.9% from the 313,000 homes that sold in January of last year, so we can see the effect of a large wintertime seasonal adjustment…that same pdf indicates that the median home selling price for all housing types fell 2.8%, from a revised $254,700 in December to $247,500 in January, while the average home sales price was $286,800, down 2.4% from the $293,800 average sales price in December, but up 1.5% from the $269,500 average home sales price of January a year ago…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 Decreased to 4.94 million in January and A Few Comments on January 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 picked from the aforementioned GGO posts, contact me…)      

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