Last Week in the News

[Adam in CO]

Sales of new homes slumped 3% in June to a seasonally adjusted annual sales pace of 1.13 million units, the first drop in four months, the Commerce Department reported July 27. Although smaller than the 4.8% decline economists had expected, slackening demand raised the inventory of unsold homes to a record high of 566,000 -- a backlog that would take six months to sell. The median price of a new home was $321,300, up just 2.3% from a year ago and down by 1.5% from May.
Meanwhile, sales of existing homes in June dropped 1.3% to a seasonally adjusted annual rate of 6.62 million units. The decline, which matched economists' predictions, was the eighth in the past 10 months. The median price of an existing home sold last month was $231,000, up just 0.9% from June 2005.
The Federal Reserve Board's latest survey of economic conditions, referred to as the Beige Book, said the economy logged decent, but slower growth in the early summer, and that overall inflation remained fairly moderate. The Fed will use the Beige Book and other economic reports to determine the future course of interest rates at its next meeting, August 8.
Orders to U.S. factories for large manufactured goods rose 3.1% in June, much better than the 1.7% gain Wall Street watchers had expected. The rebound for durables -- goods expected to last three or more years -- was powered by strong demand for commercial aircraft.
The labor market remained strong as the number of Americans filing for unemployment benefits fell by 7,000 to 298,000.
This week look for updates on construction spending on August 1 and factory orders on August 3.