WASHINGTON — New-home sales dropped unexpectedly in September while durable goods posted only a small increase last month, in a sign that the high jobless rate is keeping a brake on the economy’s recovery.
Single-family home sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 — compared with expectations for a 2.6 percent rise — as unemployment fears and tighter credit kept buyers away.
Meantime, manufacturers’ orders for durable goods increased by 1.0 percent in September, compared with the 1.5 percent climb forecast by economists surveyed by Dow Jones Newswires.
“The relatively modest increase in durable-goods orders and the drop back in new-home sales last month indicate that the economic recovery is still struggling to gather any real forward momentum,” said Paul Ashworth at Capital Economics.
While recent data have shown that the housing market is slowly stabilizing and the manufacturing sector is bouncing back, the weakness in the labor market is denting prospects for a strong comeback in consumer spending.
The unemployment rate in September rose to 9.8 percent, the highest since June 1983.
U.S. third-quarter gross domestic figures due out today are expected to show that the economy expanded for the first time in four quarters. However, since the government’s Cash for Clunkers program expired Aug. 24, question marks remain over the strength of the recovery.
Dow Jones Newswires
