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Economic Watch: Durable Goods, New Home Sales & Consumer Confidence Up

June 25, 2013

By Evan Lockridge

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The first look by the federal government at orders and shipments of manufactured durable goods in May shows conditions continue improving.

Shipments increased by 1.2% from April, the third hike out of the last four months. Leading the performance was 3.6% increase in transportation shipments, according to the U.S. Commerce Department.

Orders for manufactured durable goods also moved higher for the third of the past four months, picking up 3.6% in May from the month before. It was also led by the transportation sector, with new orders up 10.2%

A separate measure of the economy from the Commerce Department shows new homes sales rose in May to its highest level since July 2008. The 2.1% increase puts the annual rate 476,000 homes. This most recent increase is the third monthly one in a row.

The performance beat a consensus forecast by economists.

Compared with May 2012, sales last month are up 29%.

Many analysts say they are not concerned that a recent announcement by the Federal Reserve to pull back on its bond buying program, which has helped lead to record-low mortgage rates, will affect sales that much, because rates are expected to remain not far from historical lows.

Finally, a third measure of the economy, The Conference Board’s Consumer Confidence Index, which had improved in May, increased again in June. The Index now stands at 81.4 up from 74.3 in May, it highest level since January of 2008

Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year,” says Lynn Franco, director of economic indicators at The Conference Board.

“Expectations have also improved considerably over the past several months, suggesting that the pace of growth is unlikely to slow in the short-term, and may even moderately pick up.”

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