New Home Sales Up 15% Year Over Year

New Home Sales fall 8.4% in June to 350K units annualized down from the upward revision of 382K from 369K in May. The May revised mark was a two-year high for new home sales. Though down from May to June, new home sales are up 15.1% year-over-year.

The New Home Sales report shows the number of newly constructed homes with a committed sale during the month. It is compiled through a nationwide survey of 10,000 builders/owners of 15,000 building projects and through sampling of permit-issuing offices, as well as land not covered by building permits. The data is timely and is used in conjunction with the existing home sales release from the National Association of Realtors. The level of new home sales indicates housing market trends, and economic momentum signaling consumer purchases of furniture and appliances. Simply, the volume of sales indicates housing demand.

Housing Starts Show Good Increase For June

Housing starts for June increased nearly 7% to 760,000, up from 711,000 in May. This marks the higest level for housing starts since October 2008. The Housing Starts report measures the number of residential units on which construction is begun each month. A start in construction is defined as the beginning of excavation of the foundation for the building and is comprised primarily of residential housing. Since home builders don't start a house unless they are fairly confident it will sell upon its completion, if not before, changes in the rate of housing starts can tell us a lot about demand for homes and construction outlook. Furthermore, each time a new home is started, construction employment rises, revenues for the home builder and a myriad of other producers also increase; the economic "ripple effect" can be substantial.

Consumer Sentiment Following Other Indicators Down

Consumer sentiment hit the lowest level since December coming in at 72.0, down from the 73.2 reading in June. The consumer sentiment report measures the attitudes and expectations concerning both present and future economic conditions of 50...0 consumers. Just like Consumer Confidence, the level of consumer sentiment is directly related to the strength of consumer spending. It is almost identical, with two subindexes - expectations and current conditions, but has two monthly releases, a preliminary and final reading. The consumer expectations portion of the Michigan survey is a component of the leading economic indicators index. Consumer spending accounts for two-thirds of the economy, so the markets follow any indicator relating to consumer behavior and attitudes. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend.

Disappointing Jobs Numbers Keep Coming

According to the Labor Department, 80,000 U.S. jobs were created in June as employment data continues to falter. The jobs data for May was revised up from 69,000 to 77,000, though the report for April was revised down to 68,000. As shown in... this chart, jobs growth was strong in early 2012 but has been soft over the last several months. The Labor Department also reported that the unemployment rate remained unchanged from last month at 8.2%.

Bad Manufacturing Number

The Institute for Supply Management's manufacturing index (ISM Index) dropped below 50% for the first time since July 2009. The June reading of 49.7% is a sign of contraction in the manufacturing sector. Readings over 50% indicate expansion... in manufactoring. The ISM Index is a national manufacturing index based on a survey of purchasing executives at roughly 300 industrial companies. It gets reported the first business day of each month for data for prior month. It is extremely timely and nearly always moves markets. It is the king of all manufacturing indices and is considered the single best snapshot of the condition of the factory sector.