There some upside surprises in the economic data yesterday.
Reuters reports the positive data on new homes sales in the US.
Sales of new U.S. homes unexpectedly rose in August after July sales came in much weaker than first thought, while new orders for durable goods fell, according to government reports on Wednesday that signaled continued economic softness.
New single-family home sales increased 4.1 percent in August to an annual rate of 1.050 million from the downwardly revised July rate of 1.009 million, the Commerce Department said.
"The key thing is don't make too much out of the 4.1 percent increase in home sales in August," said Patrick Fearon, senior economist at A.G. Edwards & Sons Inc. in St. Louis.
"If you take into account the downward revisions in each of the previous three months, the story is that the housing market is still on a downward trend. The mortgage applications data that came out today also confirm that," Fearon said...
The supply of new homes available for sale in August at the current sales pace fell to 6.6 months' worth from 7.0 months in July. There were 568,000 homes available for sale at the end of August, down 0.4 percent from the 570,000 available at the end of July.
U.S. mortgage applications fell last week for the first time in four weeks even as interest rates dropped to a six-month low, the Mortgage Bankers Association said in a separate report on Wednesday, providing further evidence that the U.S. housing market slump is deepening.
Calculated Risk also puts the data in perspective here, here and here.
The data on US durable goods orders were more unambiguously negative. The Reuters report continues:
In a sign of future weakness for U.S. manufacturers, orders for U.S.-made durable goods, items meant to last three years or more, fell 0.5 percent in August, the second straight monthly decline and defying analyst expectations for a 0.5 percent increase. The Commerce Department also revised downward the July drop to 2.7 percent from a previously reported 2.5 percent fall...
Excluding transportation, durable goods orders fell 2 percent...
When defense orders were stripped out, orders fell 0.8 percent...
A proxy for business spending also posted a surprising drop, as nondefense capital goods orders excluding aircraft slipped 0.3 percent...
If the US data look cool, those from Europe look a bit hotter.
AFX/Forbes reports that eurozone money supply accelerated in August.
Euro zone M3 money supply grew 8.2 pct year-on-year in August, up from a 7.8 pct growth rate in July, the European Central Bank said...
The annual growth rate of M1, which is the currency in circulation and overnight deposits, fell to 7.2 pct in August from 7.4 pct in July.
Loans to the private sector grew 11.3 pct year-on-year in August, up from a growth rate of 11.1 pct in July...
And confidence looks resilient in much of Europe, Bloomberg reporting the situation in Italy and Germany:
Italian business confidence unexpectedly rose for the first time in three months in September as exports gained and declining oil prices cut manufacturing costs.
The Isae Institute's confidence index rose to 97.3 from a revised 94.9 in August, the state-funded research center said today in Rome...
Consumer confidence in Germany...rose to the highest in almost five years in September, according to the GfK's confidence index published today...
...while Reuters reports the situation in the UK:
Retail sales grew at their fastest rate in nearly two years in September helped by strong sales of household goods, a survey showed on Wednesday, bolstering the likelihood of another rate hike this year.
The Confederation of British Industry's distributive trades survey showed its reported sales balance rose to +14 in September from +12 in August, above retailers' own expectations of +13 and the highest reading since December 2004...
Retailers are expecting sales to pick-up further in October, with the expectations balance rising to +16 from +13 -- its highest since September 2004.
The main negative was a downward revision to UK second quarter growth.
The Office for National Statistics said the economy grew by 0.7 percent in the April-June period, down from an originally estimated 0.8 percent, though it left the year-on-year rate unchanged at 2.6 percent.
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