Durables Rise, So Do New Home Sales

Nov. 29, 2005
On the strength of soaring sales of military and civilian aircraft, new orders for manufactured durable goods increased 3.4% in October, a dramatic reversal from a 2% hurricane-driven decline in September, the U.S. Commerce Department reported on Nov. ...

On the strength of soaring sales of military and civilian aircraft, new orders for manufactured durable goods increased 3.4% in October, a dramatic reversal from a 2% hurricane-driven decline in September, the U.S. Commerce Department reported on Nov. 29. New orders for military aircraft and parts increased 140% to just under $7 billion in October. New orders for civilian aircraft and parts increased 50.4% to $11 billion.

Durable goods are generally big-ticket items designed to last a minimum of three years.

"The 3.4% increase in durable goods orders in October is a positive indicator but overstates the strength in the long-lived segment of manufacturing," says Daniel J. Meckstroth, chief economist at the Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group. "A better reading is obtained from non-defense-capital-goods-excluding-aircraft, which fell 1.7% in September and rose 1.3% in October."

Also on Nov. 29, Commerce and the U.S. Department of Housing and Urban Development jointly reported that sales of new single-family homes were at a seasonally adjusted annual rate of 1.424 million in October, 13% above the revised September rate of 1.26 million. October's rate was well above the 1.2 million rate that economists generally expected. The median sales price of homes in October was $231,000; the average sales price was $286,000. At the end of October, an estimated 496,000 new houses were for sale, just over a four-month supply.

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