While back-to-school shoppers are fueling stronger retail sales, the housing market has continued to cool. Here's a look at this week's economic developments and how they may impact your business.

Retail Sales Up

The start of the back-to-school season is already giving a slight boost to retailers, a pair of industry reports said this week.

Larger retailers saw a 3.3% gain in sales over last year in the week ending Aug. 19, according to Redbook Research, a New York-based private research group.

While sales at major discount and department stores slipped by just 0.2% from the previous week, they were up 2.7% compared to the same week last year, the International Council of Shopping Centers reported on Tuesday.

The council projects overall sales for August to increase by about 3%.

Home Sales Tumble

Both new- and existing-home sales plunged in July, amid signs that prices are beginning to soften, separate reports showed this week.

Existing-home sales fell by 4.1% over June to an annual rate of 6.33 million -- a full 11.2% below July 2005, the National Association of Realtors said on Wednesday.

There were 3.86 million existing homes on the market in July, 3.2% more than in June and representing a 7.3-month supply at the current sales rate, the report said.

While the median price for all housing types rose 0.9% to $230,000 over July 2005, prices for condos fell by 1% to $225,600 from a year ago, the report said.

"Many potential home buyers have been on the sidelines, some kicking the tires, but mostly waiting for sellers to compromise on prices and terms," David Lereah, the association's chief economist, said in a statement.

New-home sales were also down in July, by 4.3% over June to 1.07 million, pushing the inventory of unsold homes to an 11-year high, the Commerce Department reported on Thursday.

In July, the number of new homes on the market rose 1.1% over June to 568,000, enough for a 6.5-month supply at the current sales rate, the report showed.

In the past year, new-home sales are down a staggering 21.6%, the report said.

Yet, despite the rising number of unsold new homes, median prices remained steady at $230,000 in July, compared to $229,200 in the same period last year, according to the report.

Less Demand for Durable Goods

After two months of solid gains, a decline in demand for transportation equipment dragged orders for durable goods at U.S. factories down by 2.4% to $212 billion in July, the Commerce Department reported on Thursday.

Excluding transportation goods, which fell by $6 billion to $56.6 billion, new orders were up by 0.5%, led by computers and electronics, the report said.

Also down were shipments of durable goods, by 1.3%, while both unfilled orders and inventories were rising, the report said.

Jobless Claims Decline

Some 313,000 people filed new claims for unemployment insurance in the week ending August 19, about 1,000 fewer than the previous week, the Labor Department reported on Thursday.

The biggest declines in new claims were in Michigan, Kentucky, and California, the report said.