Two articles yesterday reported on new-home sales, U.S. worker jobless claims, and manufactured goods demand. The articles reported that:

• new-home sales tumbled to a record-low annual pace in January with no relief in sight as “mounting damage from the collapsed housing market pushes the country deeper into recession”. Sales of new homes were reported as falling 10.2% to a seasonally adjusted annual rate of 309,000, the worst showing on records going back to 1963 – weaker than economist’s expectation of 330,000;

• the government said it would take 13.3 months at the current sales pace to exhaust supply, which puts even more downward pressure on prices;

• the median sales price fell by a record drop of 9.9% to $201,100 in January, while the average home price dropped 9.8% to $234,600;

• the number of U.S. workers drawing jobless aid jumped to record high in mid-February with the number of people remaining on the benefits roll after drawing an initial week of assistance increasing by 114,000 to a record 5.1 million in the week ended February 14. At the same time, initial claims for state unemployment insurance benefits increased to a seasonally adjusted 667,000 last week from 631,000 the prior week, the highest reading since October 1982; and,

• new orders for long-lasting U.S. manufactured goods fell to a six-year low in January. Durable goods orders dropped 5.2 percent to $163.8 billion in January, the lowest level since December 2002, from a 4.6 percent decline in November.

My Comments: Other than to say that if you work the numbers on new home sales through you find that economist’s were forecasting an approximate 4% drop in the seasonally adjusted annual rate, not the 10.2% reported. I continue to wonder how people trained as economists continually seem to miss accurately (or at least ‘reasonably’ accurately) forecasting ‘next month’s’ results for most things. One explanation is that things are deteriorating at an escalating pace that defies forecasting based on historic modeling. At one level (that of ‘economist credibility’) one can only hope that is the explanation. Other than to say I continually look for good news on the economic front but am failing to find anything, I don’t have anything to add to the foregoing numbers. It seems to me they speak for themselves!

Read the referenced articles by clicking here, and clicking here.

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