GDP rose 1.1% annualized rate for the second quarter, only a marginal improvement over the previous two quarters’ growth (0.8% and 0.9%). Inventory draw was the weak link, dragging GDP down 1.3%. However, consumer spending served to counteract that, coming in strong at 4.4% annualized growth. Residential investment dropped significantly after a few strong showings in recent quarters, but building strength in new home sales suggests that this will pick up again in the third quarter. The early outlook for Q3 is positive, an estimated 3% growth.

New home sales surged 12.4% in July, bringing the annualized rate to 654,000. The surge could in part be due to lower pricing, as the median price fell 5.1% to $294,600, which is 0.5% lower Y/Y. The price for existing homes also came down, by 1.4% for the month, but otherwise existing home sales had a very different month than new home sales, slowing to a below-expectations 5.39M annualized rate, which represents a 1.6% decrease Y/Y.

After a slow first half of the year, durable goods orders had a strong July, jumping 4.4% M/M. Commercial aircraft orders led the pack, but there were gains in most industries, except for flat auto orders. One concerning aspect of the report was the 0.1% decline in unfilled orders, on top of June’s 0.9% decline, which is a negative for both production and employment. Overall, combined with last week’s strong manufacturing numbers, the report points to a potentially good second half of the year for the factory sector.