Economy Watch: New Home Sales See Modest Uptick
The Census Bureau reported on Monday that new single-family home sales experienced an increase of 1.3 percent in October compared with the previous month. The uptick took the annualized rate of new home sales nationwide to 307,000, the highest rate since last spring, but still not remotely robust. During all of 2010, only 323,000 new homes were sold, making it the worst year in that regard since the government took an interest in tracking new home sales during the Kennedy administration. Sales in November and December will have to continue to strengthen, at least moderately, for 2011 to beat 2010.
The government also reported that the median sales price of new homes sold in October came in at $212,300, a drop from from a revised $213,300 median sales price in September. The October 2011 price is actually an improvement from the same month a year ago, when the market was still in withdrawal from the homebuyer tax credit. The median sales price in October 2010 was $204,200,
“[The] report is right in line with our forecast for modest and gradual improvement in sales activity through the remainder of the year,” said NAHB chief economist David Crowe in a press statement. “Particularly encouraging is the fact that builders continue to hold down their inventories to match the current sales rate, with the number of new homes for sale now down to a sustainable, 6.3-month supply.”
Cyber Monday sales spike
Did Americans take to their keyboards in record numbers to shop on Cyber Monday, as they did in physical retail shops on Black Friday? Even before the day was quite over, online retail specialists were predicting that it would be a record day for online sales.
For instance, IBM Benchmark, a unit of tech giant IBM, forecast a 15 percent increase in online sales compared with the same day last year. Another cyber-shopping specialist, Coremetrics, also estimated a 15 percent year-over-year increase for the day. Online tracker comScore is predicting a jump in Cyber Monday online sales from $1.03 billion last year to $1.2 billion this year, a record.
Some gadgets are particularly popular this year, according to the retailers involved in Cyber Monday sales efforts. The most conspicuous among these are probably the various species of Kindles. Amazon, for one, is claiming that it sold four times as many of the e-book readers this Cyber Monday as on the same day in 2010.
IMF denies Italian bailout
It seems that the Italian press, in particular the Turin-based newspaper La Stampa, was a little too eager over the weekend to report a multi-billion euro bailout of Italy by the International Monetary Fund. On Monday, IMF managing director Christine Lagarde denied that the organization had talked with the Italian government about any such thing, or with the Spanish government for that matter. So it could be case of wishful thinking among Italian journalists, or maybe the IMF simply isn’t ready to spring such a large commitment on a nervous world—or some combination of both.
The Wall Street Journal cast cold water on the prospect of IMF help for Italy by pointing out that the organization has only about 280 billion euros available to lend to anyone, nowhere near the reported 600 billion. The rest of its assets are variously tied up or already lent, such as the 30 billion euros borrowed by Greece—small potatoes indeed compared to what Italy needs. The IMF is in the process of raising more money from its member nations, but that won’t be complete until 2013 and still wouldn’t be enough to bailout Italy single-handedly. Investors might be dreaming of an IMF magic bullet for Italy’s problems, but it doesn’t seem like the numbers add up.
Despite the euro-situation, Wall Street seemed happy on Monday that retailers did well over the weekend. The Dow Jones Industrial Average gained a sizable 291.23 points, or 2.59 percent, while the S&P 500 was up 2.92 percent and the Nasdaq advanced 3.52 percent.
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