Sunday, March 25, 2018

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

widely followed reports that were released this past week included 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, putting that monthly report back on a normal schedule, after the January report was released 3 weeks late last week (due to annual revisions)...meanwhile, 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 came in at +17 in March, the same as in February and up from +16 in January, indicating an ongoing expansion in that region's manufacturing...

February Durable Goods: New Orders Up 3.1%, Shipments Up 0.9%, Inventories Up 0.4%

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 $7.4 billion or 3.1 percent to $247.7 billion in February, after January's new orders were revised from the $239.7 billion reported last month to $240.3 billion, now 3.5% less than December's new orders…nonetheless, year to date new orders are  now up by 9.1% from those of 2017...the volatile monthly new orders for transportation equipment were responsible for most of the month’s increase, as new transportation equipment orders rose $5.5 billion or 7.1 percent to $83.5 billion, on a 25.5% increase to $13,113 million in new orders for commercial aircraft....excluding orders for transportation equipment, new orders still rose 1.2%, while excluding just new orders for defense equipment, new orders rose 2.5%....new orders for nondefense capital goods less aircraft, a proxy for equipment investment, were also strong, rising $1,172 million or 1.8% to $67,831 million...

meanwhile, the seasonally adjusted value of February shipments of durable goods, which will ultimately be included as inputs into various components of 1st quarter GDP after adjusting for changes in prices, increased by $2.2 billion or 0.9 percent to $249.7 billion, after the value of January shipments was revised from $498.8 billion to $499.2 billion, now up 0.5% from December....higher shipments of machinery led the February increase, as they increased by $0.6 billion or 1.8 percent to $33.4 billion...at the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose by $1.6 billion or 0.4 percent to $410.6 billion, after January inventories were revised from $672.4 billion to $672.6 billion, now up 0.4% from December....

finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but very volatile new orders, rose for the fifth time in six months, increasing by $2.3 billion or 0.2 percent to $1,143.3 billion, following a January decrease of 0.3% to $1,141.0 billion, which was revised from the previously reported $1,141.2 billion...a $1.4 billion or 0.2 percent increase to $773.2 billion in unfilled orders for transportation equipment was responsible for more than half the increase, while unfilled orders excluding transportation equipment orders were also up 0.2% to $370,048 million...the unfilled order book for durable goods is now 2.3% above the level of last February, with unfilled orders for transportation equipment just 1.2% above their year ago level, mostly due to a 2.4% decrease in the backlog of orders for defense aircraft...

February New Home Sales Little Changed

the Census report on New Residential Sales for February (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 618,000 homes annually during the month, which was 0.6 percent (±13.3 percent)* below the revised January annual sales rate of 622,000 new home sales, but 0.5 percent (±16.6 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 from February sales of a year ago, with the figures in parenthesis representing the 90% confidence range for the 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 593,000 reported last month to an annual rate of 622,000, and new home sales in December, initially reported at an annual rate of 625,000 and revised to a 643,000 rate last month, were revised up to a 653,000 a year rate with this report, while November's annualized new home sales rate, initially reported at an annual rate of 733,000 and revised from a 689,000 rate to a 696,000 a year rate last month, were revised back up to a 711,000 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 51,000 new single family homes sold in February, up from the estimated 47,000 new homes that sold in January and up from the 46,000 that sold in December, but unchanged from February a year ago...the raw numbers from Census field agents further estimated that the median sales price of new houses sold in February was $326,800, up from the median sale price of $324,900 in January and up from the median sales price of $298,000 in February a year ago, while the average February new home sales price was $376,700, down from the $377,100 average sales price in January, but up from the average sales price of $370,500 in February a year ago....a seasonally adjusted estimate of 305,000 new single family houses remained for sale at the end of February, which represents a 5.9 month supply at the February sales rate, up from the revised 5.8 months months of new home supply in January...for graphs and additional commentary on this report, see the following two posts by Bill McBride at Calculated Risk: New Home Sales at 618,000 Annual Rate in February and A few Comments on February New Home Sales..

February Existing Home Sales Rose 3.0%

the National Association of Realtors (NAR) reported that existing home sales increase by 3.0% from January to February on a seasonally adjusted basis, projecting that 5.54 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 just 1.1% above the annual sales rate projected in February of a year ago....the January home sales pace was unrevised at a 5.38 million annual rate...the NAR also reported that the median sales price for all existing-home types was $241,700 in February, 5.9% higher than in February a year earlier, which they report as "the 72nd straight month of year-over-year gains".....the NAR press release, which is titled "Existing-Home Sales Rebound 3.0 Percent 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 happened with home sales during the month...this unadjusted data indicates that roughly 319,000 homes sold in February, up 1.9% from the 313,000 homes that sold in January, and up by 1.3% from the 315,000 homes that sold in February of last year....that same pdf indicates that the median home selling price for all housing types rose by four-tenths of a percent, from a revised $240,800 in January to $241,700 in February, while the average home sales price slipped half a percent to $281,200 from the $282,600 average sales price in January, while it was still up 4.3% from the $269,600 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 Rebound 3.0 Percent 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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