Sunday, March 26, 2017

February’s durable goods, new home sales, existiing home sales

widely watched reports that were released this past week were the advance report on durable goods for February and the February report on new home sales, both from the Census bureau, and the Existing Home Sales Report for February from the National Association of Realtors (NAR)…the week also saw the release of the Regional and State Employment and Unemployment Summary for February from the BLS, and the Chicago Fed National Activity Index (CFNAI) for February, a weighted composite index of 85 different economic metrics, which rose to +0.34 in February from –0.02 in January, after January's index was revised from the -0.05 reported last month...as a result, the 3 month average of that index rose to +0.17 in February, up from a revised +0.02 in January, which indicates that national economic activity has been slightly above the historical trend over recent months...in addition, this week also saw the release of the Kansas City Fed manufacturing survey for March, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, which reported its broadest composite index at +20 in March, up from +14 in February and its highest reading since March 2011, indicating an accelerating expansion in that region's manufacturing...

February Durable Goods: New Orders Up 1.7%, Shipments Up 0.3%, Inventories Up 0.2%

the Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for February (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods increased by $3.9 billion or 1.7 percent to $235.4 billion in February, after January's new orders were revised from the $230.4 billion reported last month to $231.5 billion, now 2.3% more than December's new orders…as a result, year to date new orders are now up by 1.6% from those of 2016...the volatile monthly new orders for transportation equipment were responsible for the month’s increase, as new transportation equipment orders rose $3.3 billion or 4.3 percent to $80.4 billion, on a 47.6% increase to $12,681 million in new orders for commercial aircraft....excluding orders for transportation equipment, new orders still rose 0.4%, while excluding just new orders for defense equipment, new orders rose 2.3%....however, new orders for nondefense capital goods less aircraft, a proxy for equipment investment, fell $93 million or 0.1% to $64,641 million...

meanwhile, the seasonally adjusted value of February shipments of durable goods, which will be included as inputs into various components of 1st quarter GDP after adjusting for changes in prices, increased by $0.6 billion or 0.3 percent to $239.2 billion, after the value of January shipments was revised from from $478.3 billion to $478.3 billion, still down 0.1% from December...higher shipments of machinery led the February increase, as they increased by $0.3 billion or 0.9 percent to $31.1 billion...at the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose by $0.8 billion or 0.2 percent to $385.1 billion, after December inventories were revised from $383.8 billion to $384.3 billion, now up 0.1% from December....

finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but somewhat volatile new orders, fell for the eighth time in 9 months, decreasing by just $0.2 billion to $1,114.7 billion however, following a January decrease of 0.3% to $1,114.94 billion, which was revised from the previously reported 0.4% decrease to $1,114.3 billion...a $1.1 billion or 0.1 percent decrease to $752.7 billion in unfilled orders for transportation equipment was responsible for the decrease, as unfilled orders excluding transportation equipment orders were up 0.2% to $361,982 million...the unfilled order book for durable goods is now 1.5% below the level of last February, with unfilled orders for transportation equipment now 3.3% below their year ago level, mostly on a 4.6% decrease in the backlog of orders for commercial aircraft...

New Home Sales Reported Higher in February

the Census report on New Residential Sales for February (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 592,000 homes annually during the month, which was 6.1 percent (±17.3 percent)* above the revised January annual sales rate of 558,000 new home sales and 12.8 percent (±18.0 percent)* above the estimated annual rate that new homes were selling at in February of last year....the asterisks indicate that based on their small sampling, Census could not be certain whether February new home sales rose or fell from those of January, or even from February sales of a year ago, 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 of new single family homes in January were revised from the annual rate of 555,000 reported last month to an annual rate of 558,000, and new home sales in December, initially reported at an annual rate of 536,000 and revised to a 535,000 rate last month, were revised down to a 530,000 a year rate with this report, while November's annualized new home sales rate, initially reported at an annual rate of 592,000 and revised up to a 598,000 a year rate last month, were revised back down to a 573,000 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 49,000 new single family homes sold in February, up from the estimated 41,000 new homes that sold in January and up from the 38,000 that sold in December.....the raw numbers from Census field agents further estimated that the median sales price of new houses sold in February was $296,200, down from the median sale price of $308,200 in January and down from the median sales price of $311,300 in February a year ago, while the average February new home sales price was $390,400, up from the $355,300 average sales price in January, and up from the average sales price of $349,400 in February a year ago....a seasonally adjusted estimate of 266,000 new single family houses remained for sale at the end of February, which represents a 5.4 month supply at the February sales rate, down from the 5.7 months of new home supply reported in January...for graphs and additional commentary on this report, see the following two posts by Bill McBride at Calculated Risk: New Home Sales increase to 592,000 Annual Rate in February and A few Comments on February New Home Sales..

February Existing Home Sales 3.7% Lower

the National Association of Realtors (NAR) reported that existing home sales fell by 3.7% from January to February on a seasonally adjusted basis, projecting that 5.48 million existing homes would sell over an entire year if the February home sales pace were extrapolated over that year, a pace that was still 5.4% above the annual sales rate projected in February of a year ago....the NAR also reported that the median sales price for all existing-home types was $228,400 in February, up from the revised $227,300 in January, and 8.1% higher than in February a year earlier, which they report as "the 60th consecutive month of year-over-year gains".....the NAR press release, which is titled "Existing-Home Sales Stumble in February", 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 usually look at the raw data overview (pdf) to see what actually transpired during the month...this unadjusted data indicates that roughly 315,000 homes sold in February, down 1.3% from the 319,000 homes that sold in January, but up by 0.3% from the 314,000 homes that sold in February of last year....that same pdf indicates that the median home selling price for all housing types rose by half a percent, from a revised $227,300 in January to $228,400 in February, while the average home sales price inched up to $270,100 from the $269,500 average sales price in January, while it was up 5.8% from the $255,300 average home sales price of February 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 Stumble in February" and A Few Comments on February 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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