November’s durable goods and new home sales

With several of the major month end reports already released last week, the only widely watched reports released this week were the advance report on durable goods for November and the new residential sales report for November, both from the Census Bureau….This week also saw the Chicago Fed National Activity Index (CFNAI) for November, a weighted composite index of 85 different economic metrics, which increased to –0.12 in November from –0.50 in October, which was revised down from the –0.40 reading reported for October last month…that left the 3 month average of the CFNAI at -0.31 in November, down from -0.27 in October, which, as a negative number, would indicate that national economic activity had averaged below the historical trend over those three Autumn months… in addition, this week also saw the results from another regional Fed manufacturing survey for December: the Richmond Fed Survey of Manufacturing Activity, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, reported their broadest composite manufacturing index rose to −10 in December from −14 in November, indicating that a slightly smaller plurality of that region’s manufactures reported deteriorating conditions in December than a month earlier…

November Durable Goods: New Orders Fell 1.1%, Shipments Fell 0.1%, Inventories Rose 0.4%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for November (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods decreased by $3.0 billion or 1.1 percent to $285.1 billion in November, the third decrease in four months, after October’s new orders were revised from the 0.2% increase to $286.6 billion reported last month to an 0.8% increase to $288.1 billion…year to date new orders are now 1.3% below those of the first eleven months of 2023, down from the 0.8% year ​t​o date decrease we saw in this report last month….

A decrease in the value of the volatile monthly new orders for transportation equipment drove this month’s decrease, as the value of new transportation equipment orders fell $2.9 billion or 2.9 percent to $95.5 billion, led by a 7.0% decrease to $17,129 million in new orders for commercial aircraft and parts… excluding orders for transportation equipment, other new orders were down 0.1%, while excluding just new orders for defense equipment, new orders fell 0.3%….at the same time, the value of new orders for nondefense capital goods less aircraft, a proxy for new equipment investment orders, rose $521 million or by 0.7% to $74,305 million, after falling by an upwardly revised 0.1% in October..

Meanwhile, the seasonally adjusted value of November’s shipments of durable goods, which will ultimately be included as inputs into various components of 4th quarter GDP after adjusting for changes in prices, fell for the fourth consecutive month, decreasing by $0.3 billion or 0.1 percent to $285.1 billion, after the value of October shipments was revised from $285.2 billion to $285.5 billion, now down 0.5% from September…the value of shipments transportation equipment fell $1.1 billion or 1.2 percent to $90.7 billion, on a 6.4% decrease in the value of shipments of commercial aircraft and parts and a 0.4% decrease in the value of shipments of motor vehicles and parts, while shipments of durable goods other than those of transportation equipment were up 0.4% for the month…of those, shipments of nondefense capital goods less aircraft rose 0.5% to $74,163 million, after October capital goods shipments were revised down from $74,351 million to $73,816 million, now a 0.1% decrease from September…..

At the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the first time in four months, increasing by $1.9 billion or 0.4 percent to $529.8 billion, after the value of October inventories was revised from $527.7 billion to $524.36 billion, now ​d​own less than 0.1% from September… the value of inventories of transportation equipment increased $1.5 billion or 0.9 percent to $172.1 billion, led by a 1.3% increase to $83,680​ million in the value of inventories of commercial aircraft and parts….excluding inventories of transportation equipment, the value of all other durable goods inventories rose 0.1%, while the value of inventories of capital goods less aircraft rose by 0.2% to $163,617 million…

Finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but volatile new orders, rose for the fifty-first time in fifty-two months, increasing by $4.8 billion or 0.3 percent to $1,405.0 billion, after unfilled orders for October were revised from $1,398.8 billion to $1,400.2 billion, now a 0.5% increase from September….a $4.8 billion or 0.5 percent increase to $908.2 billion in the value of unfilled orders for transportation equipment was responsible for the November increase, while unfilled orders other than those for transportation equipment fell by $25 million to $496,746 million, or were statistically unchanged…compared to a year earlier, the unfilled order book for durable goods is 2.1% above its level of last November, with unfilled orders for transportation equipment 3.2% above their year ago level, largely due to a 4.7% increase in the value of the backlog of orders for commercial aircraft….

New Home Sales Reported 5.9% Higher in November on 5.4% Lower Prices

The Census report on New Residential Sales for November (pdf) estimated that new single family homes were selling at a seasonally adjusted annual pace of 664,000 homes during the month, which was 5.9 percent (+/- 18.6%)* above the revised October rate of 627,000 new home sales annually, and was 8.7 percent (±19.3 percent)* above the estimated annual rate that new homes were selling at in November of last year…the asterisks indicate that based on their small sampling, Census could not be certain whether November’s new home sales rose or fell from those of October, or even from those of November of last year, 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 new single family homes in October were revised ​u​p from the annual rate of 610,000 reported a month ago to 627,000, while home sales in September, initially reported at an annual rate of 759,000 and unchanged with the last report, were revised lower, to a 736,000 a year rate with this report, and while August’s annualized home sale rate, initially reported at an annual rate of 716,000 and revised from the initially revised from a 709,000 a year rate to a 690,000 a year rate with the last report, were revised up to a 691,000 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 suggested that approximately 45,000 new single family homes probably sold in November, down from the estimated 46,000 new homes that sold in October and the 59,000 estimated sales in September…..the raw numbers from Census field agents further estimated that the median sales price of new houses sold in November was at $402,600, down 5.4% from the median sale price of $425,600 in October and down 6.3% from the median sales price of $425,600 in November a year ago, while the average November new home sales price was $484,800, down from the $525,400 average sales price in October, and down from the average sales price of $527,800 in November a year ago….a seasonally adjusted estimate of 490,000 new single family houses remained for sale at the end of November, which represented a 8.9 month supply at the November sales rate, down from the revised 9.2 months of new home supply in October, which was originally reported as a 9.5 month supply…for graphs and additional commentary on this report, see the following posts by Bill McBride at Calculated Risk: New Home Sales Increase to 664,000 Annual Rate in November and the identically titled New Home Sales Increase to 664,000 Annual Rate in November, which in turn links to his in-depth real estate newsletter article on this report….

 

 

(the above is the synopsis that accompanied my regular sunday morning news 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 of which are picked from the aforementioned GGO posts, contact me…)