WASHINGTON – Orders for durable goods and the number of Americans signing contracts to buy an existing home rebounded in May, easing concern the worlds largest economy is faltering.
Bookings for goods meant to last at least three years rose 1.1 percent, the first increase since February, a Commerce Department report showed Wednesday. Pending home sales climbed 5.9 percent after slumping 5.5 percent in April, according to data from the National Association of Realtors.
The economy is growing, but its still muddling through, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, who forecast a gain in durables orders and pending home sales. Concerns about the collapse of manufacturing are grossly overblown. Were in a housing recovery.
The increase in demand for U.S. durable goods followed a revised 0.2 percent drop in April that was reported as little changed. Orders fell 6.8 percent in the first four months of the year.
May looked OK, but the trend is still relatively soft, said Michael Feroli, chief U.S. economist at JPMorgan Chase in New York. Its soft, but its not collapsing.
Manufacturing is probably going to slow here in the middle of the year, Feroli said.
The median forecast of 76 economists surveyed by Bloomberg News called for a 0.5 percent gain in durable-goods orders. Survey estimates ranged from a decline of 1.5 percent to an increase of 2 percent.
Meantime, housing is showing signs of stabilizing. Pending home sales provide insight into actual contract closings a month or two later. Purchases of existing homes, which made up about 93 percent of the housing market last year, are tabulated when the contract closes.
Wednesdays figures suggest sales of existing homes will rebound after a drop in May. Purchases declined 1.5 percent last month to a 4.55 million annual rate, the Realtors group said June 21.
Compared with a year earlier, May pending sales of previously owned properties climbed 15.3 percent after a 14.7 percent April gain.
The for sale housing market has, in fact, bottomed, Stuart Miller, CEO of builder Lennar Corp. said. We have commenced a slow and steady recovery process.