THOUGHTS ON WEDNESDAY’S DATA
Mixed data this morning on Wall Street. New home sales came in worse than expected at 342,000. That was well below the expected figure of 365,000. The prior two months were also revised down 24,000. Median prices rose to $221,000 and inventories remained high at 10.2 months. All in all, the seasonal strength in housing is proving to be a bit disappointing. The second half of the year could be worse than many expect on the housing front.
Durable goods posted a surprise 1.8% climb on the back of last months 1.9% climb. Analysts were expecting a 0.5% decline. Ex-transports the figure was 1.1% – a respectable move higher. This is no doubt a positive sign for the economy and a further sign that the economy is rebounding from a very low trough. Whether this is a sign of sustainable growth is entirely different. I am skeptical. The year over year decline was still 22% which is a staggering figure.
