No good news in the economic numbers today.
- Durable goods orders dropped for the fifth consecutive month. Excluding transportation and military expenditures, they were down 4.9% from last month. For 2008 orders were down 5.7%. That number includes transportation and military related expenditures.
- The four week moving average of new unemployment claims rose by 24,250 to 542,500
- The big surprise was new home sales. For December sales of new homes fell 14.7% to an annual seasonally adjusted pace of 331,000. For the entire year 482,000 new homes were sold which is 37.8% less than were sold in 2007.
The first two sets of data weren’t unexpected. Everyone expected bad news on new home sales but the magintude of the drop is shocking. It’s abundantly clear that foreclosed home sales are hammering the new home market. The builders simply can’t compete on a price basis. That would indicate that 2009 may not be materially better for them.
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