Sunday, November 27, 2016

October durable goods, new and existing home sales

there were just a few 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...on Monday we had the release of the Chicago Fed National Activity Index (CFNAI) for October, a weighted composite index of 85 different economic metrics, which rose to -0.08 in October from -0.23 in September, revised from the -0.14 that had been reported for September last month....that left the 3 month average of the index at –0.27 in October, down from a revised –0.20 in September, which indicates that national economic activity remains somewhat below the historical trend over recent months....in addition, Tuesday also saw the release of the Richmond Fed Survey of Manufacturing Activity for November, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, which reported its broadest composite index rose to +4 in November from -4 in October, the first positive reading in 3 months, suggesting a return to expansion for that region's manufacturing...

October Durable Goods: New Orders Up 4.8%, Shipments Up 0.1%, Inventories Unchanged

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 watched new orders for manufactured durable goods increased by $11.0 billion or 4.8 percent to $239.4 billion in October, after September's new orders were revised from the $227.3 billion reported last month to $228.4 billion, now 0.4% greater than August's orders, which had originally been reported as down 0.1%...year to date new orders are still 0.2% below those of 2015, vs the -0.4% 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 big jump, as new transportation equipment orders rose $9.5 billion or 12.0 percent to $88.2 billion, on a 94.1% increase to $21,819 million in new orders for commercial aircraft....excluding orders for transportation equipment, new orders still rose 1.0%, and excluding just new orders for defense equipment, new orders increased 5.2%.... at the same time, new orders for nondefense capital goods less aircraft, a proxy for equipment investment, rose $234 million or 0.4% to $63,053 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 changes in prices, increased by  $0.2 billion or 0.1 percent to $234.6 billion, after September shipments were revised from from $234.5 billion to $234.4 billion, still up 0.8% from August...shipments of transportation equipment were down 1.4% on a 0.7% decrease in shipments of motor vehicles, a 3.6% decrease in shipments of commercial aircraft, and a 4.4% decrease in shipments of defense aircraft, while a $0.3 billion or 1.1% increase to $30.5 billion in shipments of fabricated metal products 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 4th month in a row, after being down the prior 6 months, increasing by $0.1 billion or less than 0.1 percent to $383.7 billion, after September inventories were revised from $384.0 billion to $383.6 billion, statistically unchanged from August...a $0.2 billion or 0.2 percent to $123.8 billion in inventories of transportation equipment accounted for the increase, as without them other inventories were down by $0.1 billion...

finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but volatile new orders, increased for the first time in 5 months, rising by $8.2 billion or 0.7 percent to $1,128.6 billion, following a September decrease of 0.2%, which was revised from the previously reported 0.4% decrease...a $7.5 billion or 1.0 percent to $773.1 billion increase in unfilled orders for transportation equipment was responsible for most of the increase, as unfilled orders excluding transportation equipment orders were up $753 million or 0.2% to $355,527 million...compared to a year earlier, the unfilled order book for durable goods is still 1.1% below the level of last October, with unfilled orders for transportation equipment still 1.9% below their year ago level, largely on a 6.7% decrease in the backlog of orders for motor vehicles...  

Recent New Home Sales Revised Lower, Still Ahead of Last Year’s Pace

the Census report on New Residential Sales for October (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 563,000 homes annually, which was 1.9 percent (±13.1%)* below the revised September rate of 574,000 new single family home sales a year but 17.8 percent (±16.9%) above the estimated annual rate that new homes were selling at in October of last year....the asterisk indicates that based on their small sampling, Census could not be certain whether October new home sales rose or fell from those of September, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series....with this report; sales new single family homes in September were revised from the annual rate of 593,000 reported last month to a 574,000 a year rate, while home sales in August, initially reported at an annual rate of 609,000 and revised to a 575,000 a year rate last month, were revised to a 567,000 a year rate with this report, and while July's annualized home sale rate, initially reported at an annual rate of 654,000 and revised from a 659,000 a year rate to a 652,000 a year rate last month, were further revised down to a 622,000 rate with this release..

the annual rates of sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 45,000 new single family homes sold in October, approximately the same as the estimated 45,000 new homes that sold in September but down from the 47,000 that sold in July.....the raw numbers from Census field agents further estimated that the median sales price of new houses sold in October was $304,500, down from the median sale price of $314,100 in September but up from the median sales price of $298,700 in October a year ago, while the average October new home sales price was $354,900, down from the $364,100 average sales price in September, and down from the average sales price of $366,900 in October a year ago....a seasonally adjusted estimate of 246,000 new single family houses remained for sale at the end of October, which represents a 5.2 month supply at the October sales rate, up from the reported 4.8 months of new home supply in September...for graphs and additional commentary on this report, see the following two posts by Bill McBride at Calculated Risk: New Home Sales at 563,000 Annual Rate in October and A few Comments on October New Home Sales..

October Existing Home Sales Up 2.0% from September

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 a post recession record 5.60 million existing homes would sell over an entire year if the October home sales pace were extrapolated over that year, a pace that was also 5.9% above the annual sales rate projected in October of a year ago...September sales, now shown at a 5.49 million annual rate, were revised up from the 5.47 million annual rate indicated by last month's report...the NAR also reported that the median sales price for all existing-home types was $232,200 in October, down from $235,300 in September but 6.0% higher than in October a year earlier, which they report as "the 56th consecutive month of year-over-year gains".....the NAR press release, which is titled "Existing-Home Sales Jump Again 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 446,000 homes sold in October, down by 8.2% from the 486,000 homes that sold in September, and up by less than a half percent from the 471,000 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 1.3%, from a revised $235,300 in September to $232,200 in October, while the average home sales price was $274,300, down 1.0% from the $277,100 average sales price in September, but up 4.4% from the $262,700 average home sales price of October a year ago...regionally, average home sales prices ranged from a low of $212,000 in the Midwest to a high of $372,900 in the West, with only the West seeing average home prices rise by a modest $500... for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following two posts from Bill McBride at Calculated Risk: Existing Home Sales increased in October to 5.60 million SAAR 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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