Durables' Orders, New Home Sales Send Mixed Signals

By John S. McClenahen Neither new orders for durable goods nor new homes in January met economists' expectations. Rather than remaining unchanged from their December 2001 mark, new orders for manufactured durable goods last month rose 2.6% to $179.1 billion, reveal data from the U.S. Commerce Department's Bureau of the Census. Transportation equipment, paced by motor vehicles, displayed the biggest increase: 5.9%. Orders for nondefense aircraft were up 3.3%. And new orders for semiconductors sent computers and electronic products up 2.2%. "The worst is probably over for technology fundamentals," suggests Stan Shipley, a senior economist at Merrill Lynch & Co., New York. In contrast, new home sales took an unexpected dive in January, falling 15% to a seasonally adjusted annual rate of 823,000 from December's revised rate of 966,000. A report jointly issued by the Commerce Department and the U.S. Department of Housing & Urban Development also notes that the January 2002 mark is 12% below the January 2001 level of 938,000. Shipley discounts the January 2002 weakness in new home sales a bit. Noting that sales of existing homes soared to a record rate in January, he says that "the reality of the housing market is somewhere in between."

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