This Week's Economic Roundup
The nation's manufacturers were busier in September with more orders for durable goods, while colder weather continued to give chain stores a boost in sales. Here's a look at this week's economic developments and how they may impact your business.
Durable Goods Orders Up
A surge in demand for U.S.-made commercial airplanes propelled orders for durable goods to a record-high 7.8 percent increase to $226.7 billion in September, the Commerce Department reported on Thursday.
The gains followed two straight months of declines, the report said.
Yet, excluding transportation, which saw a staggering 183.2 percent rise in orders for non-defense aircraft alone, new orders increased by just 0.1 percent, the report said.
While orders for machinery, electronic equipment, and appliances were on the rise in September, fewer orders were made for computer and communications equipment, among other products, the report said.
Inventories of durable goods rose 1 percent to $2.8 billion, following a 0.6 percent gain in August, the report said.
As a whole, the manufacturing sector grew by 4 percent last year, with durable-goods manufacturers contributing the most to state gross domestic product growth in as many as 10 states, the Commerce Department reported on Thursday.
Real GDP by state -- the total value of all good and services produced in the country -- grew by 3.6 percent in 2005, above a seven-year average growth rate of 3.1 percent, the report said.
For the third time in as many months, the Federal Reserve announced on Wednesday that it would hold its benchmark interest rate steady at 5.25 percent, saying it expects the economy to grow at a slower pace in the months ahead.
Chain Store Sales Rise
Cooler temperatures helped boost sales at major retailers by 3.2 percent in the week ending Oct. 21, marginally below a 3.5 percent gain the previous week, according to Redbook Research, a New York-based private research group.
Chain store sales have risen 1.3 percent from the same period last year, the group said.
Housing Prices Dip
While existing-home sales continued to fall in September, new-home sales posted a modest comeback, increasing by 5.3 percent over August to an annual rate of 1.075 million, the Commerce Department reported on Thursday.
At the same time, median prices for new homes sold in September fell by 9.7 percent compared to the same time last year to $217,100 -- the sharpest decline in more than 30 years, the report said.
Despite the drop in prices, new home sales are down 14.2 percent from last year. By month's end, there were 557,000 new homes for sale on the market, enough for a 6.4 month supply at the current sales rate, the report said.
Meanwhile, existing home sales fell by 1.9 percent to an annual rate of 6.18 million in September, the National Association of Realtors said on Wednesday.
Inventories of existing homes on the market dropped to 2.4 percent at the end of the month, leaving 3.75 million homes on the market, representing a 7.3-month supply at the current sales rate, the report said.
The median price for all housing types of existing homes was $220,000 in September, a 2.2 percent decline from last year, the report said.
"The good news is that fewer new listings are coming online," Thomas Stevens, the association's president, said in a statement. "A stable sales pace is expected to draw down the number of listings to a supply balance that will support positive growth within a few months."
Jobless Claims Increase
The number of new claims for unemployment insurance rose by 8,000 to 308,000 in the week ending Oct. 21, the Labor Department reported on Thursday.
The biggest increase in new claims were in Michigan, South Carolina, and North Dakota, while claims were down in Pennsylvania, Kentucky, and Illinois, the report said.