By Timothy R. Homan
Sept. 25 (Bloomberg) -- Orders for durable goods probably rose in August for the fourth time in the last five months, a sign companies are gaining confidence the U.S. is emerging from the worst recession since the 1930s, economists said before reports today.
Bookings for long-lasting goods likely rose 0.4 percent, according to the median forecast of 75 economists surveyed by Bloomberg News. Another report may show purchases of new homes climbed last month to a one-year high, the survey showed.
Government stimulus measures such as “cash for clunkers” and credits to first-time homebuyers have revived manufacturing and housing, two areas that deepened the slump. Federal Reserve policy makers this week acknowledged the economy had picked up and pledged to keep interest rates low for the foreseeable future to ensure the rebound is sustained.
“The recovery is here, and it’s starting to look like it will be more robust than we previously thought” said Christopher Low, chief economist at FTN Financial in New York. “There’s no question it would not be happening at all without stimulus. But the stimulus is there and will continue to be there next year.”
The Commerce Department’s durable goods report is due at 8:30 a.m. in Washington. Survey estimates ranged from a decline of 2 percent to a 4 percent increase. The projected gain would follow a 5.1 percent surge in July that was the biggest jump in two years.
Broad Gains
Excluding transportation equipment, such as cars and aircraft, orders climbed 1 percent, according to the survey median. That would be the fourth monthly gain and the longest streak since November 2005.
Carmakers including General Motors Co. and Ford Motor Co. plan to boost output through the second half of the year to rebuild depleted inventories. The government’s $3 billion cash- for-clunkers incentive to trade in gas-guzzlers for more fuel- efficient vehicles lifted auto sales and production last month.
GM will add a third shift at three U.S. plants that are taking on additional production from factories slated to close or be idled. The facilities getting the new shifts are in Fairfax, Kansas; Fort Wayne, Indiana; and Delta Township, Michigan, GM said this week. The changes will restore 2,400 jobs, the Detroit-based company said.
“This is a really good day for GM employees,” Tim Lee, the company’s vice president of global manufacturing, said during a Sept. 22 conference call. An additional 600 jobs will be restored at stamping and powertrain facilities, he said.
New-Home Sales
Data on new-home sales, due from the Commerce Department at 10 a.m., will probably show sales rose 1.6 percent to a 440,000 rate, according to the survey median. They reached a record-low rate of 329,000 in January.
The Obama administration’s $8,000 tax credit for first- time buyers has helped boost new-home sales this year.
Sales of existing homes, meanwhile, unexpectedly fell last month for the first time since March. Purchases dropped 2.7 percent in August to a 5.1 million annual rate, the second- highest level in the last 23 months, the National Association of Realtors said yesterday. The median price dropped 12.5 percent from August 2008.
Housing starts rose to a nine-month high in August, the Commerce Department reported last week, signaling residential construction may soon add to growth after subtracting from gross domestic product since 2006.
The Standard & Poor’s Homebuilder Supercomposite is up 29 percent so far this year, compared with a 16 percent gain for the broader S&P 500.
Consumers are becoming less pessimistic as the recession eases. The Reuters/University of Michigan index of consumer sentiment probably rose to 70.5 this month from 65.7 in August, according to economists’ forecasts before today’s report, due at 10 a.m.
Bloomberg Survey
===============================================================
Durables Durables U of Mich New Home
Orders Ex-Trans Conf. Sales
MOM% MOM% Index ,000’s
===============================================================
Date of Release 09/25 09/25 09/25 09/25
Observation Period Aug. Aug. Sept. F Aug.
---------------------------------------------------------------
Median 0.4% 1.0% 70.5 440
Average 0.4% 1.1% 70.5 442
High Forecast 4.0% 2.3% 72.0 500
Low Forecast -2.0% 0.3% 67.0 420
Number of Participants 75 44 65 75
Previous 5.1% 1.1% 70.2 433
---------------------------------------------------------------
4CAST Ltd. 1.0% 2.0% 71.0 450
Action Economics 2.0% 0.6% 71.0 450
Aletti Gestielle SGR 2.2% --- 71.0 440
Ameriprise Financial Inc 0.5% 0.8% 70.0 435
Argus Research Corp. -0.5% --- 71.0 430
Banesto 0.4% --- 70.0 440
Bank of Tokyo- Mitsubishi 0.9% --- 68.8 441
Bantleon Bank AG -0.5% 0.3% 70.2 436
Barclays Capital 0.5% --- 71.0 445
Bayerische Landesbank 0.3% 1.0% 71.0 445
BBVA -0.7% 0.5% 70.3 446
BMO Capital Markets -0.7% 1.5% 70.5 445
BNP Paribas 0.0% 1.5% 70.0 450
Briefing.com 1.2% 0.7% 71.2 425
Calyon 0.2% 0.9% 70.0 437
Capital Economics 0.5% 0.8% 70.2 500
CIBC World Markets -0.8% 0.5% --- 444
Citi 0.9% 1.1% 72.0 450
ClearView Economics 0.5% --- 67.0 450
Credit Suisse 1.0% 2.0% 70.0 430
Daiwa Securities America 2.0% --- --- 460
Danske Bank --- --- 70.0 435
DekaBank -1.0% --- 71.0 430
Desjardins Group 1.5% --- 70.2 440
Deutsche Bank Securities 2.0% 0.5% 71.0 440
Deutsche Postbank AG -0.2% 1.2% 70.5 ---
DZ Bank 0.5% 1.1% 70.2 440
First Trust Advisors 0.1% 1.5% 71.0 447
Fortis 0.5% --- --- 440
FTN Financial 2.5% 1.5% 70.5 450
Goldman, Sachs & Co. 0.0% --- --- 442
Helaba 0.0% --- --- 440
Herrmann Forecasting -0.2% 0.5% 70.5 446
High Frequency Economics -1.0% 0.5% 70.2 450
IDEAglobal 0.3% 0.5% 72.0 445
IHS Global Insight 0.7% --- 70.0 450
Informa Global Markets 0.5% --- 69.5 440
ING Financial Markets 0.5% 1.0% 69.7 440
Insight Economics 2.0% --- 70.0 445
Intesa-SanPaulo 1.0% 2.0% 69.5 450
J.P. Morgan Chase 1.0% 1.5% 70.0 440
Janney Montgomery Scott L 0.4% 1.1% --- 427
Jefferies & Co. 0.8% --- 70.5 466
Johnson Illington Advisor -1.0% --- 70.0 430
Landesbank Berlin 4.0% 1.5% 70.5 420
Landesbank BW -1.0% --- 70.5 440
Merrill Lynch/BAS 1.0% 2.3% 71.0 455
MFC Global Investment Man 0.7% 1.5% 71.0 445
Mizuho Securities -2.0% --- 70.5 433
Moody’s Economy.com 1.0% 1.0% 70.7 455
Morgan Keegan & Co. -0.3% --- --- 421
Morgan Stanley & Co. -0.6% --- --- 450
National Bank Financial 0.3% 1.5% 70.3 445
Natixis 0.2% 1.1% --- 450
Newedge 0.1% 0.8% 70.0 440
Nomura Securities Intl. 1.2% 0.8% --- 425
Nord/LB -0.5% 0.7% 70.0 ---
PNC Bank -2.0% --- --- 425
Raymond James 1.5% 2.1% 71.0 460
RBC Capital Markets 0.4% 1.2% 70.5 447
RBS Securities Inc. -1.5% --- 70.2 425
Ried, Thunberg & Co. -1.2% --- 72.0 440
Schneider Foreign Exchang -1.7% 0.6% 70.0 435
Scotia Capital 0.2% 0.6% --- 470
Societe Generale 1.0% 1.0% 72.0 433
Standard Chartered 0.1% 0.8% 71.0 445
Stone & McCarthy Research 2.4% --- 71.0 440
TD Securities 1.0% 0.5% 72.0 445
Thomson Reuters/IFR 1.4% 1.0% 71.5 460
UBS --- --- 71.0 440
UniCredit Research 0.0% --- 71.0 435
Union Investment --- --- 70.5 ---
University of Maryland 1.5% --- 70.2 443
Wells Fargo & Co. -0.5% 0.5% --- 440
WestLB AG 0.8% --- 70.0 445
Westpac Banking Co. 1.5% --- 71.0 422
Woodley Park Research -1.6% --- 70.5 424
Wrightson Associates -1.2% --- 72.0 440
===============================================================
To contact the reporter on this story: Timothy Homan in Washington at thoman1@bloomberg.net
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