Economic indicators on Monday were mixed, as the New York Federal Reserve reported that business activity “edged slightly higher in New York State” in August, but the general business index plummeted.
The National Association of Home Builders reported that home builder confidence is at an all-time high.
The general business conditions index fell to 3.7 in August from 17.2 in July, the Federal Reserve Bank of New York reported on Monday.
Economist projected the index would come in at 15.0.
The new orders index moved down into contraction territory at negative 1.7 from positive 13.9, while the shipments index narrowed to 6.7 from 18.5, and unfilled orders fell to negative 14.0 from negative 0.6, the Fed said.
The delivery time index moved backward to 1.3 from 2.6, while the inventories index dipped to negative 10.7 from negative 9.7 in the prior survey. The prices paid index edged up slightly to 16.0 from 14.9 and the prices received index moved into expansion territory to positive 4.7 from negative 4.5.
The number of employees index rose to 2.4 from 0.4, while the average employee workweek index moved deeper into contraction territory to negative 6.8 from negative 2.6.
Looking six months into the future, the general business conditions index moved lower to 34.3 from 38.4 last month. The new orders index fell to 37.2 from 41.9, while the shipments index decreased to 30.8 from 39.4, and unfilled orders moved into contraction territory to negative 5.3 from positive 0.6, the Fed said. The delivery time index also moved to contraction territory to negative 3.3 from positive 3.2. while the inventories index dropped to negative 0.7 from zero
The prices paid index declined to 22.7 from 28.6, while the prices received index slipped to 9.3 from 10.4. The number of employees index moved lower to 15.5 from 21.1, while the average employee workweek index slipped to 2.0 from 3.9, the Fed reported. The capital expenditures index decreased to 6.0 from 9.1. The technology spending index dipped to 8.0 from 8.4.
NAHB
Builder confidence soared to new heights in August, a sign that “housing continues to lead the economy forward,” according to the National Association of Home Builders. The housing market index vaulted to 78 in August from 72 in July, NAHB reported on Monday.
Economists polled by IFR Markets predicted the index to come in at 73.
“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI,” said Chuck Fowke, chairman of NAHB. “However, the V-shaped recovery for housing has produced a staggering increase for lumber prices, which have more than doubled since mid-April. Such cost increases could dampen momentum in the housing market this fall, despite historically low interest rates.”
The HMI now stands at its highest reading in the 35-year history of the series, matching the record that was set in Dec. 1998.
“Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020,” said Robert Dietz, chief economist NAHB. “Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”
