In Florida, hurricanes forced delayed closings and dampened home sales.
By Associated Press
Published September 25, 2004
WASHINGTON - Orders to U.S. factories for big-ticket goods dropped in August, largely weighed down by a sharp decline in demand for commercial airplanes.
The Commerce Department reported Friday that orders for durable goods - costly manufactured products expected to last at least three years - declined by 0.5 percent, following a 1.8 percent advance in July.
The manufacturing picture looked better when volatile transportation equipment, such as airplanes, was excluded: Orders rose by a solid 2.3 percent in August. That compared with a flat reading for July and marked the biggest increase since March.
Separately, sales of previously owned homes declined by 2.7 percent in August from July to a seasonally adjusted annual rate of 6.54-million units, the National Association of Realtors reported. Even with the drop, which followed a 2.9 percent decrease in July, the pace of sales was still considered healthy, economists said.
"Since April, we've experienced three out of the four strongest months on record for existing-home sales and August was the sixth highest," said David Lereah, the association's chief economist.
In Florida, Hurricane Charley and the threat of Hurricane Frances dampened home sales in August. Though closings were delayed when buyers were unable to obtain insurance because of the approaching storms, the number of homes changing hands last month was still up 3 percent, with 20,294 sales compared to 19,748 a year ago.
Median sales price, meanwhile, rose 15 percent to $189,500 compared to $164,100 a year ago.
The Tampa-St. Petersburg-Clearwater area reported the most sales in the state last month, with a total of 4,391 homes sold compared to 3,907 homes in August 2003, up 12 percent. Median sales price in the Tampa Bay area increased 16 percent to $166,400; a year ago, it was $143,100.
In addition to delaying closings, hurricanes damaged real estate offices in many areas of the state.
Realtors in Punta Gorda, where Hurricane Charley made landfall Aug. 13, were unable to provide data on their market's sales as a result of the damage.
On Wall Street, bargain hunters kept stocks mixed Friday, allowing blue chips to rise despite a new record high for oil prices. But fresh warnings from semiconductor firms sent the tech sector falling, and the three major indexes ended the week substantially lower.
Oil prices pushed past the previous record close of $48.70 on Aug. 19, renewing investors' fears of $50-per-barrel prices. A barrel of light crude for November delivery settled at $48.88, up 42 cents, on the New York Mercantile Exchange.
The Dow Jones industrials average gained 8.34 points to close at 10,047.24.
Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index gained 1.75, or 0.2 percent, to 1,110.11, and the Nasdaq composite index was down 6.95, or 0.4 percent, at 1,879.48.
For the week, the Dow fell 2.3 percent, the S&P was down 1.6 percent and the Nasdaq dropped 1.6 percent. Overall, it was the worst week for the markets since the first week of August.
In the manufacturing report, economists were forecasting a 0.3 percent decline in overall durable-goods orders for August based on the expectation that demand for commercial airplanes would decline after shooting through the roof in July.
Orders for commercial aircraft plunged by 42.8 percent in August, compared with a 103.6 percent surge in July. Bookings for military airplanes and parts also declined in August.
That drop in airplane bookings masked gains elsewhere. Orders for cars, computers, communications equipment, electrical equipment and appliances, and fabricated metal products all went up in August.
Those gains reinforce economists' beliefs that the manufacturing recovery continues to march ahead.
The Federal Reserve, citing some improvements in the economy, boosted short-term interest rates this week by one-quarter percentage point to 1.75 percent, the third rate increase since June when the Fed's current rate-raising campaign got under way.
Fed policymakers said the economy, after moderating earlier this year in part because of soaring energy prices, had appeared to regain some strength.
The economy is a premier issue on the campaign trail. President Bush and Democratic opponent John Kerry hold divergent views on how the economy and the job market are doing. Bush says his tax cuts have helped the economy rebound. Kerry says the president's tax cuts have mainly benefited the wealthy and plunged the government's balance sheets deeper in the red.
Times Staff Writer Kris Hundley contributed to this report.