Sharp increase in new home sales with 7.8% increase in durable orders is the recipe for higher rates
Fred Day
Oct. 26, 2006

The durable orders went up by 7.8% and at the same time as prices moderates, new home sales were sharply higher. Both the numbers way above the market expectations. The labor market showed some tightness as claims stayed at 308K level slightly higher than last week. The labor shortage within the parameters of underemployment, sharp increase in new home sales with 7.8% increase in durable orders manifest that the US economy may have experienced a soft landing and is ready to accelerate very fast on the upside.

The durable orders release measures the dollar volume of orders, shipments, and unfilled orders of durable goods (defined as goods whose intended lifespan is three years or more). Orders are considered a leading indicator of manufacturing activity.

Fed watchers now has to watch out. The inflation expectation is rising and that can affect the future rates. It seems Fed will start hiking rates again as early as March 2007. Longer term though underemployment and stagflation will cause trouble.

Sharp increase in new home sales with 7.8% increase in durable orders is the recipe for higher rates
Fred Day
The inflation expectation is rising and that can affect the future rates. It seems Fed will start hiking rates again as early as March 2007.
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Sentiment indicator says real estate bottomed - new homebuilders in panic mode with sharpest decline in prices
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The number of homes sold actually increased but the prices dropped sharply...
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Media Release
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When leading indicator, stock prices and consumer sentiment goes up simultaneously, you have an undeniable expansion in the cards.
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Fed hawkish on increase of consumer sentiment numbers as gasoline price decline
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An inside look at Fed statement - pause in rate hikes, hawkish on inflation watch and soft landing expectation on real estate
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The most important part of their decision making comes from their assessment of the manufacturing and service side of the economy.
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