New economic data highlights positive direction

New economic data highlights positive direction

Sales of new homes increased last month for the first time since July, the Dept. of Commerce reported yesterday, as sales of new one-family houses in February 2009 were at a seasonally adjusted annual rate of 337,000

Sales of new homes increased last month for the first time since July, the Dept. of Commerce reported yesterday, as sales of new one-family houses in February 2009 were at a seasonally adjusted annual rate of 337,000.

While the February data is 4.7% above the revised January 2009 rate of 322,000, it is still 41.1% below the February 2008 estimate of 572,000, the Dept. of Commerce noted.

According to the Wall Street Journal, the increase was fueled by higher activity in the South and West, where low prices on foreclosures and other distressed properties have increased interest. The paper also noted that prices may soon pick up as well. In addition, earlier this week a government gauge of home prices posted its first gain in nearly a year, while sales of previously-owned homes also increased last month, the Journal said.

The median sales price for a new home was $200,900 in February—far higher than the median sales price for an existing home of $165,400 but down from $251,000 in February 2008, the Dept. of Commerce said.

In addition, new orders for manufactured durable goods increased $5.5 billion, or 3.4%, to $165.6 billion last month, the U.S. Census Bureau announced. The increase follows six consecutive monthly decreases, including a 7.3% drop in January.

Freight has begun to pick up slightly, as well. The American Trucking Assns. (ATA) seasonally-adjusted for-hire truck tonnage index increased 1.7% in February 2009, the second consecutive month-to-month increase.

However, the 4.8% total gain over the past two months did not erase the 7.8% contraction in December, and the not-seasonally adjusted index fell 2% in February after dropping 4.4% in January, ATA said.

“As I said last month, tonnage will not fall every month on a seasonally adjusted basis, and just because it rose again in February doesn’t mean the economy is on the mend,” said Bob Costello, ATA chief economist. “Tonnage plunged again on a year-over-year basis, which highlights the current weakness in the freight environment.”

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