New-Home Sales Fell 1.6% in May; Consumer Confidence Declines
U.S. new home sales in May fell more than expected, while consumer confidence in June fell to a 10-month low amid anxiousness about jobs and the business climate, adding to signs of sluggish economic growth this year.
Sales of new U.S. homes fell 1.6 percent last month to an annual rate of 915,000 from a downwardly revised rate of 930,000 in April, the Commerce Department said Tuesday. Analysts had been looking for May new home sales of 925,000. While sales fell, sales prices rose. The median sales price of a new home climbed 1.5 percent in May to $236,100 from $232,700 in April. That marked a reversal for new homes from April, when prices fell a record amount but sales rose strongly.
"Housing's contribution to (economic) growth will be negative in both the second quarter and the third quarter," said Steven Wood, chief economist at Insight Economics in Danville, California.
Consumer Confidence Slips
Consumer confidence in June also fell more than expected. The Conference Board said its index of consumer sentiment fell to 103.9 this month, the weakest since August 2006, from an upwardly revised 108.5 in May. Economists polled by Reuters had been looking for a reading of 105.5.
The data as a whole had little impact on the bond market, but stocks erased early gains on the relatively gloomy economic news.
Also on Tuesday, the Federal Reserve Bank of Richmond said its composite manufacturing index rose to 4 in June from -10 in May.
Early in the day, data showed chain store sales growth slipping last week. Redbook Research said chain store sales rose only 1.4 percent last week from a year earlier, while the International Council of Shopping Centers and UBS Securities said sales rose 1.7 percent for the week versus a year ago.