The economy expanded at the fastest pace in almost three years, logging GDP of 4.6% in the second quarter, revised up from a previous estimate of 4.2%. This is the best performance since the fourth quarter of 2011, and the expansion was broad-based, with upward revisions to all categories except consumer spending, which was unchanged at 2.5%.
Also on the upside, new home sales powered up for the second month in August, rising 18% to the highest level in over six years. The increase brought sales to an annual pace of 594,000 units. Even with gain in sales, the inventory of new homes on the market reached the highest level in four years: at the current pace it would take 4.8 months to clear the market.
After four months of gains, existing home sales slipped last month, falling 1.8% to an annual pace of 5.05 million units. The decline came as investors paying in cash retreated from the market – the share of properties sold to investors was the lowest in almost five years. All cash sales fell to 23% of the market, and investor purchases fell to 12%. Investors have been trickling out of the market as the supply of cheap, distressed properties has declined: distressed properties accounted for 8% of the market in August – the lowest since October 2008.
In a negative headline, durable goods orders plummeted a record 18.2% in August. On a brighter note, the decline was the result of a drop in demand for commercial aircraft, rather than a broad weakening, and comes after a record 22.5% surge in July . Stripping out transportation, orders rose .7% and business investment increased as well.