March Durable Goods and Consumer Confidence, Feb. New Home Sales, Jan. House Prices

 Mixed Data Suggests Ongoing Momentum, but Also Ongoing Uncertainty

  • March New Orders for Durable Goods gained 5.7 percent as aircraft orders rebounded.
  • The Conference Board’s Consumer Confidence Index fell sharply in March to 59.7.
  • New Home Sales for February fell by 4.6 percent to a 411,000 unit annual rate after a January surge.
  • The Case-Shiller 20-City Composite House Price Index for January gained 0.1 percent.
  • The Dallas Fed’s Texas Manufacturing Index showed that business activity improved in March.
  • The Richmond Fed’s Manufacturing Index also showed improving conditions in March.

U.S. economic data at the close of the first quarter was mixed, consistent with the view that economic momentum continued through the quarter but conditions remain far from normal in part due to ongoing uncertainty about fiscal tightening and other regulatory issues. New orders for durable goods gained 5.7 percent in March. This is a deceptively positive number, boosted by a rebound in both defense and nondefense aircraft orders. Non-transportation sectors were mixed. Core orders, nondefense capital goods excluding aircraft, fell by 2.7 percent in March after gaining 6.7 percent in February. Consumer confidence fell sharply in March according to the Conference Board. Their Consumer Confidence Index fell to 59.7 after increasing in February to 68.0. Concern over fiscal tightening was mentioned as a possible contributing factor in the loss of confidence.

Housing-related data has been a bright spot for the U.S. economy. Both new and existing home sales have been on an upward trend. However, in February new home sales gave back some of their January gains. After surging to a 431,000 unit annual rate in January, new home sales relaxed by 4.6 percent to a 411,000 unit rate in February. The February sales rate was still well above the 2012Q4 average. Home prices continue to firm up. The Case-Shiller 20-City Composite House Price Index increased by 0.1 percent for the month. Over the previous 12 months the index was up 8.1 percent.  All 20 city indexes are now in positive territory in year ago comparisons. Phoenix leads the way with a 23.2 percent increase over 12 months. Dallas is up 7.0 percent, Detroit 13.8 percent, Los Angeles 12.1 percent, Miami 10.8 percent, San Diego 9.8 percent and San Francisco 17.5 percent.

The Dallas Federal Reserve’s Texas Manufacturing Outlook Survey was positive in March. Comments were generally favorable. However, regulatory uncertainty was cited as a factor in two industries. The Richmond Fed’s Survey of Manufacturing Activity expanded in March, but at a slower pace than it did in February.

Market Reaction: U.S. equity indexes opened with gains. Treasury yields are up slightly. NYMEX crude oil is up to $95.54/barrel. The dollar is up against the yen and down versus the euro.

home prices

Click here for a PDF version of the Comerica Economic Alert: Durable Goods 032613.

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