Taking a look at the breakdown of the report, the west region posted the largest decline in sales, tumbling 25.4 percent, and was followed by a 13.9 percent decrease in the Northeast. Indeed, today’s release does not bode well for the U.S. as consumers continue to face a weak labor market and subdued wage growth. As of late, nonfarm payrolls fell 131K for the month of July, while the unemployment rate remained at 9.5 percent as hundreds of thousands of workers left the labor force. At the same time, consumers fear purchasing new home sales as credit conditions remain tight, as a report by the Federal Reserve showed earlier this month. The disappointing figures today trails yesterday’s plunge in existing home sales. Going forward, the Fed will likely maintain a dovish outlook for policy as uncertainty in the economy lingers.
U.S. New Home Sales Actual Versus Expectations
Source: Bloomberg
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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