July home sales up as prices jump 18%
Sales of new homes rose a modest 1% in July after a string of declines while new home prices set records. The Commerce Department reported Tuesday that July sales increase left sales at a seasonally adjusted annual rate of 708,000.
Sales had fallen in April, May and June as builders confronted problems with surging lumber prices and a shortage of construction workers. Home prices, however, have continued to rise, setting new records in July.
The median price of a new home sold in July climbed to an all-time high of $390,500, up 18.4% from a year ago.
Even with the small sales gain in July, new home sales are 27.2% below the pace of a year ago. Sales peaked at a rate of 993,000 units in January but have cooled since then, though remain at historically high levels.
The surge in prices may start to slow in coming months as builders work to ramp up construction. The number of new homes for sale at the end of July stood at 367,000, up 5.5% from the June inventory level and 26.1% higher than a year ago.
"While demand for homes remains strong, high prices and backlogs in construction will temper sales in the months ahead," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
With sales still surging, Best Buy boosts outlook
Best Buy Co. is raising its full-year sales outlook after the nation's largest consumer electronics chain posted fiscal second-quarter results that beat analysts' projections.
Best Buy joins a slew of other retailers including Walmart, Target and Macy's that have posted strong results for the quarter, underscoring that the consumer remains resilient. The Richfield, Minnesota-based company was not broadsided during the pandemic like many other retailers, particularly nonessential merchants, because Americans stuck at home stepped up spending on webcams, laptops and other technology used to get them through lockdowns and working, learning from home.
But the latest results show that shoppers' appetite for consumer gadgets remains strong.
Best Buy earned $734 million, or $2.90 per share, for the three-month period ended July 31. Adjusted for one-time gains or losses, per-share earnings were $2.98, easily eclipsing per-share projections of $1.91 from Wall Street, according to Zacks Investment Research.
Revenue surged 20% to $11.85 billion, also better than industry analysts had expected.
Sales at established stores jumped 20%.
For the current quarter ending in November, Best Buy said it expects revenue in the range of $11.4 billion to $11.6 billion. Analysts surveyed by Zacks had been expecting revenue of $10.49 billion.
U.S probes Boeing for safety concerns
Federal officials are taking another look at the safety climate inside aircraft maker Boeing. The Federal Aviation Administration says 35% of people in a key engineering unit have raised concerns about their ability to work independently of the company and communicate with safety regulators. The FAA says it is looking more closely at the situation.
The investigation raises further questions about a longstanding FAA practice of relying on employees of aircraft manufacturers to perform safety-related analysis. The policy is supposed to take advantage of the employees' specialized knowledge, but it's come under scrutiny since two deadly crashes involving the Boeing 737 Max, a plane that the FAA certified.
The FAA's initial investigation ran from May until July. An FAA official described it in an Aug. 19 letter to Boeing's leader of safety and aircraft certification.
"We take these matters with the utmost seriousness, and are continuously working to improve the processes we have in place to ensure the independence" of employees who work on behalf of the FAA, said Boeing spokeswoman Jessica Kowal. She said those employees "must be accorded the same respect and deference that is shown" to FAA personnel.
The FAA examination raises further questions about a longstanding practice of relying on employees of aircraft manufacturers to perform safety-related work, including analysis of critical aircraft systems. The policy is supposed to take advantage of the employees' specialized knowledge, and the companies are supposed to give those workers authority to perform the safety-related functions without interference.
McDonald's pulls shakes due to driver shortage
McDonald's says it has pulled milkshakes from the menu in all 1,250 of its British restaurants because of supply problems stemming from a shortage of truck drivers.
The fast-food chain says it is also experiencing shortages of bottled drinks.
"Like most retailers, we are currently experiencing some supply chain issues, impacting the availability of a small number of products," McDonald's said in a statement Tuesday. "Bottled drinks and milkshakes are temporarily unavailable in restaurants across England, Scotland and Wales."
It said it was "working hard to return these items to the menu."
It is the latest in a series of shortages to parts and products in Britain blamed on a combination of Brexit and the coronavirus pandemic. Britain's exit from the European Union at the end of last year has made it harder for the bloc's citizens to work in the U.K., and businesses have also been hit by large numbers of employees having to self-isolate because of possible exposure to the virus.
- Compiled by Dave Flessner