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New home sales in the US rose to their highest level since the dwindling days of the housing bubble, underscoring a strong housing market rebound as people seek more space while they work from home and go to school. Sales of new single family homes hit an annual pace of 901,000 in July, an increase of nearly 14% from the previous month and the highest overall level since December 2006. While growth appears to have slowed in other sectors of the economy over the past month, it is still strong. This is likely to have positive effects, from employment in construction to demand for sawn timber, appliances and furniture.
Good luck in finding your dream home. As demand increases, supply decreases. The monthly supply of homes for sale hit its lowest level since 2013. And people’s realization that they can work from anywhere while Covid-19 offices are closing has sparked bidding wars for homes in some remote areas of the West .
WHAT YOU NEED TO WATCH TODAY
US orders for durable goods an increase of 5% compared to the previous month is expected for July. (8:30 a.m. ET)
🎥 Video: WSJ Explains Durable Goods and Why Investors Are Looking For A Better Visibility Of Business Beyond Heading Numbers Look here.
Thomas Barkin, President of the Richmond Fed speaks to the Morgantown Area Partnership at 10 a.m. CET.
Chief Economist at the Bank of England, Andy Haldane speaks at a webinar at the Edinburgh International Culture Summit at 12 p.m. ET.
A hot real estate market seems like cold comfort to many Americans. Consumer confidence fell for the second straight year in August, as households said business and employment conditions had deteriorated over the past month, according to a survey by the Conference Board. The report warns that mounting concerns about the economic outlook and financial well-being are likely to cool consumer spending in the coming months. “We suspect the still widespread incidence of Covid-19 infection is undermining confidence and the phasing out of federal unemployment benefits is also dampening sentiment,” said Kathy Bostjancic, an economist at Oxford Economics.
American Airlines said it would lay off 19,000 workers on October 1. Coupled with retirements and temporary leaves of absence, the cuts will make the carrier about 30% smaller than it was in March, and it is the clearest sign of the destruction that lies ahead for the US Aircraft industry. US airlines have warned employees that more than 75,000 jobs could be cut this fall. The airlines agreed not to lay off workers until the end of September as the $ 25 billion they received as part of a comprehensive stimulus package was passed in March. Efforts to raise an additional $ 25 billion in funds to keep airline workers in place through March 2021 have stalled in recent weeks as Congress fails to reach an agreement on a more comprehensive pandemic relief package Alison Sider reports.
High demand + limited supply = bottlenecks
Best Buy’s online sales rose last quarter as consumers bought laptops, appliances, and other items that help them work, study, and cook from home. However, executives said that product shortages hurt profits. According to Dave Sebastian, consumers have reported bottlenecks or delays trying to order everything from Google’s Chromebooks to Maytag freezers.
- Schools are facing a laptop shortage. Districts say many students are lacking equipment to start teaching online due to supply chain challenges and increasing demand.
Demand for cans is booming during the coronavirus pandemicThis drives manufacturers to increase capacity to avoid bottlenecks. When bars and restaurants in the US closed, consumers rushed to buy large packs of drinks – usually canned – from supermarkets, executives say. Sales of canned food also rose. Saabira Chaudhuri reports that this is accelerating a sustained shift in favor of aluminum drinking cans, which already contained glass and plastic bottles.
World trade declined the most in two decades this spring as coronavirus lockdowns disrupted air and sea traffic and weighed on demand for many consumer and capital goods. Trade had already weakened before the crisis, which was affected by geopolitical tensions and new tariffs. In addition to these disruptions, the pandemic has raised new questions about the resilience of Supply chains Paul Hannon reports that they stretch across the globe and drive a third of world trade.
Pandemic, Low Oil Prices and a Recession? No problem
Saudi Arabia is pushing billion dollar plans to build a flood of new cities despite the coronavirus pandemic and depressed oil prices, and is betting that the projects will spur economic recovery. The developments are all part of Crown Prince Mohammed bin Salman’s plan diversify the economy away from oil by attracting foreign investment and increasing domestic consumption. The giant projects are intended to spawn industries like tourism and entertainment that the Saudi Arabian monastery has never seen before, even if these sectors worldwide suffer from socially distant policies that have been imposed to contain the spread of the virus, reports Stephen Kalin.
WHAT WE’LL READ
The coronavirus has not destroyed any major cities. “Real, living, inspiring human energy exists when we grow together in crazy places like New York City. Pitying yourself for not being able to go to the theater for a while isn’t the essential element of character that made New York a brilliant has diamond of activity will be there again someday. You found a place in Florida? Well. We know the sharp focus and restless, resilient creative spirit that Florida is all about. You think Rome is going too? London “Tokyo? The East Village? They are not. They are changing. They mutating. They are reforming. Because greatness is rare. And the real greatness that New York City is more than rare,” writes comedian Jerry His field The New York Times.
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