Durables and Jobless Claims Fall, New Home Sales Rise

- Durable Goods Orders for September fell 2.1% versus estimates of a 1.5% decline and an upwardly revised 3.8% gain in August.
- Durables Ex Transportation for September fell 1.0% versus estimates of an .8% gain and an upwardly revised 5.1% increase in August.
- Initial Jobless Claims for last week fell to 328K versus estimates of 340K and 356K the prior week.
- Continuing Claims rose to 2904K versus 2862K prior.
- New Home Sales for September rose to 1222K versus estimates of 1250K and a downwardly revised 1197K in August.

BOTTOM LINE: US durable orders fell more than forecast in September, a sign that rising energy prices may have made companies more wary about purchasing new aircraft, computers and communications equipment, Bloomberg said. A machinist strike at Boeing contributed to a 42% plunge in aircraft orders. Bookings for non-defense capital goods excluding aircraft, an indication of future business investment, fell 1.2% in September after rising 4% the prior month. I expect Durable Goods Orders to rebound through year-end on lower energy prices and hurricane rebuilding.

The number of American filing first-time claims for unemployment benefits declined for a second week as filing waned from workers displaced by the Gulf Coast hurricanes, Bloomberg said. The four-week moving average of jobless claims fell to 366,500 from 376,500 the prior week. The insured employment rate, which tracks the US unemployment rate, rose to 2.3% from 2.2%. The labor market should continue improving from the effects of the hurricanes through year-end.

US new home sales rose in September from the second-lowest level of the year, suggesting that rising energy costs and mortgage rates have yet to damp the housing market, Bloomberg said. The median price of a new home fell to $215,700 from $228,800 in August. New homes sales are still on pace to set another annual record. The supply of new homes for sale at the current pace was unchanged from August at 4.9 months. New home sales rose 24.9% in the Midwest and 5.6% in the South. Sales fell 20% in the Northeast and 11.8% in the West. I continue to believe the housing market is slowing to more healthy sustainable levels.