Durable goods orders up in May; new house sales dip
Posted: June 24, 2009 at 11:07 a.m.
A shopper walks past a lawn tractor for sale at Sears Grand in Solon, Ohio on Tuesday.
WASHINGTON — Orders to U.S. factories for manufactured goods from computers to aircraft surged in May for a second straight month. And a gauge of business investment rose last month by the most in nearly five years. Together, the data Wednesday signal that the recession could be at or near its bottom.
Yet new-house sales fell unexpectedly last month. It was a reminder that any recovery in the housing market will be long and slow.
The Commerce Department said demand for durable goods rose 1.8 percent last month, far better than the 0.6 percent decline that economists expected. It matched the rise in April, with both months posting the best performance since December 2007, when the recession began.
Orders for nondefense capital goods, a proxy for business investment plans, jumped 4.8 percent, the biggest increase since September 2004. That could signal that businesses have stopped trimming their investment spending.
The back-to-back monthly gains in orders for durable goods - items expected to last at least three years - were further evidence that a dismal stretch for U.S. manufacturers may be nearing an end. But analysts say any sustained rebound is months away.
"This is a pretty good report and welcome news in the hard-pressed (capital expenditure) sector," M. Cary Leahey, an economist at New York-based consulting firm Decision Economics, wrote in a research note.
Still, new-house sales dropped 0.6 percent in May to a seasonally adjusted annual rate of 342,000, from a downwardly revised April rate of 344,000. Economists had expected a sales pace of 360,000 last month, according to Thomson Reuters. Sales were down nearly 33 percent from May last year.
The median sales price, $221,600, was down 3.4 percent from a year earlier but up 4.2 percent from April.
Read tomorrow's Arkansas Democrat-Gazette for full details.
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