Commerce department sends mixed messages
August 24, 2005
Two reports issued by the US Commerce Department on Wednesday sent mixed
messages about the health of the US economy.
The first report provided data showing that new-home sales were up 6.5 percent in July over June’s sales, to a seasonally adjusted annual rate of 1.41 million units, a new record high for new home sales.
Sales were up in the West and the Northeast, but fell in the South and the Midwest. The median price of a new home was $203,800 in July, less than the $212,400 of a year ago.
The second report, however, showed that new factory orders for durable goods, large items expected to last for a minimum of three years, were down by 4.9 percent in July from the previous month’s figures.
The decline was the first since March, and the largest since a decline in orders of 5.7 percent in January of 2004.
When orders for transportation equipment, which are traditionally variable, the orders decline for July was 3.2 percent, compared to a gain of 3.6 percent in June.
July’s drop in orders was substantially more than the 1.2 percent drop that had been expected.
Some analysts said that at least a part of the decline could be explained by caution in the business community due to increased costs brought on by rising oil prices.