In their fourth consecutive monthly decline, September’s new home sales dropped to their lowest rate since December 2016, with a -5.5% drop from August bringing the seasonally adjusted annual rate (SAAR) of sales to 553,000, and down -13.2% from September 2017. At the end of the month there were an estimated 327,000 new homes for sale, raising the supply from 6.5 to 7.1 months, with a median price of $320,000, and and average price of $377,200. On a yearly basis sales dropped the most in the Northeast at -51.3%, followed by a -15.8% drop in the West, and a -11.4% drop in the South, while sales increased in the Midwest at +4.1%. More homes were available from $200,000 - $299,999 (+4% to 36%) and $300,000 - $399,999 (+1% to 23%), with fewer homes priced less than $200,000 (-3% to 10%), and fewer priced higher than $500,000 (-6% to 14%).

New orders for durable goods in August were revised upwards from +4.5% to +4.6% and new orders in September were up +0.8%, with the bulk of September’s increase due to a +119% increase in defense aircraft orders. Excluding transportation brought the increase in new orders down to +0.1%, and excluding all defense orders brought new orders down to a -0.6% drop for the month. Defense capital goods orders had been up by +48.9% in August, but contracted by -14.3% in September, leading to a -4.4% drop in overall new capital goods orders for the month. On a yearly basis, overall new orders are up +8.9%, with defense capital goods up +22.7% and transportation orders up +11.2%. The yearly transportation increase was due to +19.3% increase for defense aircraft, a +16.6% increase for nondefense aircraft, and a +7.1% increase for motor vehicles. Only new orders for computers and related products dropped for the year at -9.9%.

GDP for the third quarter grew at +3.3% vs. 4.2% in the second quarter, with after-tax, inflation adjusted real personal income increasing at the same +2.5% rate as the second quarter. Personal consumer spending rose from a +3.8% seasonally adjusted annual gain in Q2 to +4.0% in Q3, while the personal savings rate fell from 6.8% to 6.4%. The trade deficit widened by -1.78%, primarily due to a -0.59% drop in goods exports and a -1.23% increase imports. Private investment spending grew at +2.03% based largely on a +2.07% growth in inventories, with a minor offset from a -0.04% drop in fixed investments. The drop in fixed investments itself was a mix of a +0.35% gain in intellectual property products, a -0.26% drop in nonresidential structure spending, and a -0.16% drop in residential spending. Government spending grew at +0.56% (vs. +0.43% in Q2), with the increase in federal spending dropping from +0.24% to +0.21%, and state and local spending increasing from Q2’s +0.20% rate to +0.35%.