High Prices Drove Up Orders for Big-Ticket Items in May

Orders for durable goods—big-ticket items like planes, cars, and computers—rose in May, even if you’re one of the many consumers who have been growing discontent with the economy, reports showed Monday. At the same time, pending home sales broke a six-month streak of declines.

Here’s a quick look at the most significant economic indicators of the day and what they mean for you.

Durable Goods Orders

• The Number: Orders for durable goods—higher-priced things like planes, cars, machinery, and computers—rose for the third consecutive month in May, according to the Census Bureau.
• What the Economists Are Saying: Economists were heartened that growth came in 0.5 percentage points higher than they expected, but warned that some growth could be from the increase in prices for goods. 
• What It Means for You: People and businesses were still feeling confident enough to make large purchases in May, despite what has now become record-low consumer sentiment. If everyone cut back on large-item spending because they lost confidence in the economy, manufacturers could cut back on production, and that could also mean employee layoffs or less hiring.

Pending Home Sales

• The Number: Homes under contract increased for the first time in six months, according to an index gathered by the National Association of Realtors. Pending sales, defined as homes under contract, lead home sales and are often used as an indicator of what’s to come in the housing market.
• What the Economists Are Saying: Economists broadly expected a 4% decrease in pending home sales. 
• What It Means for You: Combined with a higher-than-expected number of new home sales announced last week, people are still in the market to buy a house despite higher interest rates. If you’re looking to buy a home, you have more options than you did this time last year and that could mean lower prices for homes that have been on the market for a while. 

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