Economy Watch: New Home Sales, Manufacturing PMI Drop

Sales of new single-family houses nationwide dropped 11.5 percent in July, compared to June. The Markit Flash U.S. Manufacturing PMI dropped to 56.3 in July, compared with 57.3 in June.

Sales of new single-family houses nationwide came in at an annualized rate of 406,000 units, according to the Census Bureau on Thursday. That’s 8.1 percent below the May rate of 442,000 units, and 11.5 percent lower than the rate in June 2013.

The bureau also reported that new home sales this year, through June, were 225,000 units. That’s down 4.3 percent from 235,000 during the first half of 2013, but early 2013 is a difficult comparison period, since annual sales that year were up 16.3 percent from 2012. Also, sales in the first four months of 2013 were up 26 percent from the same period in 2012.

The median sales price of new U.S. houses sold in June was $273,500, and the average sales prices was $331,400, according to the bureau. The inventory of new houses for sale was 197,000 units, which represents a supply of 5.8 months at the current rate of sales.

Manufacturing PMI Drops in July 

The Markit Flash U.S. Manufacturing PMI dropped to 56.3 in July, compared with 57.3 in June, according to Markit Economics Ltd. on Thursday, pointing to the slowest improvement in overall manufacturing business conditions in the last three months. Still, manufacturing is expanding, since a reading of more than 50 indicates improving business conditions for that sector of the economy.

Manufacturers indicated a rise in payroll numbers for the 13th successive month in July. Anecdotal evidence in the report cited increased new business inflows and greater backlogs of work, according to Markit. However, the rate of employment growth eased for the first time since April.

Separately, the U.S. Department of Labor reported on Thursday that for the week ending July 19, initial unemployment claims were 284,000, a decrease of 19,000 from the previous week, and the lowest level for initial claims since Feb. 18, 2006, when it was 283,000. The four-week moving average was 302,000, a decrease of 7,250 from the previous week. That too was relatively low – the lowest level since May 19, 2007, when it was 302,000.

Wall Street had another mixed day on Thursday, but really didn’t move much. The Dow Jones Industrial Average was down 2.83 points, or a scant 0.02 percent, and the Nasdaq lost 0.04 percent. The S&P 500 eked out a 0.05 percent gain.