Pending home sales rise modestly in July
The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, according to the National Association of Realtors (NAR).
The index, released Thursday, is 19.1% below June 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months, according to the NAR.
Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”
Deere sells wind energy business
Moline, Ill.-based Deere & Co. has signed an agreement to sell John Deere Renewables, its wind energy business, to Exelon Generation Co., a wholly owned subsidiary of Exelon Corp. Deere expects the transaction will close in 2010.
John Deere Renewables includes 36 completed projects in eight states with an operational capacity of 735 megawatts. The agreement includes the completed projects plus others in development.
“As Deere sharpens its own strategic focus, we have concluded that the company’s resources are best invested in growing our core equipment businesses around the world,” said Samuel R. Allen, Deere & Co. chairman and CEO. “We have chosen to place the wind portfolio with Exelon in part due to its demonstrated leadership in the energy industry.”
Deere said the $900 million sale, including earn-out provisions, will result in an after-tax charge of about $25 million in its fourth-quarter results.
Consumer Confidence bounces slightly in August
The Consumer Confidence Index increased slightly to 53.5 in August, up from 51.0 in July, but down from 54.1 in August 2009.
The Conference Board’s index (1985=100) increased with the short-term outlook, according to director Lynn Franco. “Consumers’ assessment of current conditions, however, was less favorable as employment concerns continue to weigh heavily on consumers’ attitudes. Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future. All in all, consumers are about as confident today as they were a year ago.”
The Present Situation Index decreased to 24.9 from 26.4. The Expectations Index increased to 72.5 from 67.5 last month.
Consumers were also less pessimistic about future job prospects. Those expecting more jobs in the months ahead increased to 14.6% from 14.2%, while those anticipating fewer jobs decreased to 19.4% from 20.9%. The proportion of consumers expecting an increase in their incomes held steady at 10.6%.