Factory orders increased 0.6% in May, the U.S. Commerce Department announced Wednesday, on rising demand for computers and defense equipment. It was the third consecutive monthly rise in factory orders, the Commerce Department said. Excluding the often-volatile transportation component, factory orders increased 0.4%.

Economists surveyed by Bloomberg News had expected May factory orders to increase by 0.6%. Factory orders increased a revised 1.3% in April.

Economists follow the factory orders statistic because it provides one of the most comprehensive surveys of advance orders for durable goods -- how busy factories are likely to be in the period ahead. Factory orders also are a major value-added component of the U.S. economy.

In May, new orders rose 1.2%, bookings increased 0.6%, shipments rose 0.1%, and unfilled orders increased 0.1%. Also, the inventories-to-shipments ratio was virtually unchanged in May at 1.23, compared to 1.22 in April.

Oil fell $3.92 to $133.08 per barrel Wednesday at mid-day after the U.S. Energy Information Administration announced that weekly crude oil inventories unexpectedly rose by 803,000 barrels.

Economists surveyed by Bloomberg News had expected crude oil inventories to decrease by 1.1 million barrels last week. It was the first rise in weekly oil inventories in six weeks. Also, gasoline supplies fell by 153,000 barrels.

A rarity: A bearish oil report

Traders took a bearish view of the weekly oil report, and sold the major energy commodities. In mid-day Wednesday trading unleaded gasoline fell about 3 cent to $3.43 per gallon. Heating oil fell about 3 cents to $3.78 per gallon. Natural gas declined 19 cents to $12.82 per million BTUs.

New home sales in the U.S. fell 2.5% to a seasonally adjusted, annualized pace of 512,000 in May, with sales in the Western U.S. plunging to a 26-year low, the U.S. Commerce Department announced Wednesday (pdf).

Economists surveyed by Bloomberg News had expected May new home sales to register a 515,000 annualized rate.

Sales are still down about 40% compared to a year ago. In 2007, 776,000 new homes were sold, compared to 1.05 million in 2006.

Meanwhile, inventories rose to a 10.9-month supply in May at the current sales pace, compared to a 10.6-month supply in April. A typical, healthy housing market has a three to four month supply of homes for sale.

Sales fell in three regions: 11.6% in the West, 7.9% in the Northeast, and 5.1% in the Midwest. Sales rose a scant 0.4% in the South. Further, the West's 114,000 annualized sales pace was that region's slowest sales pace in 26 years.

U.S. durable goods orders were flat in May, as demand for airplanes and defense goods offset weakness in machinery and metals, the U.S. Commerce Department announced Wednesday.

Economists surveyed by Bloomberg News had expected May durable goods orders to remain flat. Durable goods orders decreased a revised 1.0% in April.

Equally significant, excluding the often-volatile transportation component, durable goods orders fell 0.9% in May. Also, excluding defense orders, durable goods orders declined 0.6%.

In May, shipments fell 1.1%, unfilled orders increased 0.9%, inventories increased 0.4%.

By category, in May orders for civilian aircraft jumped 10.3%, transportation increased 2.6%, computers and electronics climbed 2%, motor vehicles and parts declined 3.3%, transportation goods dropped 3.7%, and machinery declined 5.3%.

Foreign demand continues

Economist David H. Wang told BloggingStocks Wednesday exports continue to offset sluggish domestic demand conditions. "Export demand continued in the May report. It's helping keep U.S. businesses and factories busy during this down period in domestic demand," Wang said.

The decline in U.S. home values continues to accelerate, and the U.S. housing sector is showing few signs of a recovery.

Home prices in a 20-city sample plunged 15.3% in April, on a year-over-year basis, according to the S&P / Case-Shiller U.S. National Home Price survey. In March, prices in the 20-city sample declined 14.4%.

Economists surveyed by Bloomberg News had expected home prices in the 20-city Case-Shiller survey to decline 16.0% in April on a year-over-year basis.

Economist Peter Dawson said that while he doesn't expect this latest housing data point to sway the U.S. Federal Reserve regarding interest rates ahead of its Wednesday 2:15 p.m. EDT announcement, the continued housing price decline will highlight the headwinds facing the U.S. economy. "The house price declines will underscore to the Fed that while oil is feeding inflation, significant economic drags remain, and housing is the biggest drag, so the Fed has to be concerned about the potential for a pronounced economic stall," Dawson said. "They have to be careful to not raise interest rates too quickly and choke-off a recovery."

Oil treaded water at $134 per barrel Wednesday after the U.S. Energy Information Administration announced that weekly crude oil inventories fell a smaller-than-expected 1.2 million barrels.

Economists surveyed by Bloomberg News had expected crude oil inventories to decrease by 1.75 million barrels last week. Also, gasoline supplies fell 1.2 million barrels.

The decrease in oil inventories had little affect on oil prices, at least initially. In mid-day Wednesday trading, oil was up 5 cents to $134.06 per barrel. The other major energy commodities were also virtually unchanged. Unleaded gasoline fell about 1 cent to $3.39 per gallon. Heating oil fell about 2 cents to $3.60 per gallon. Natural gas gained 7 cents to $13.02 per million BTUs.

U.S. crude oil inventories now stand at 301 million barrels and are at the lower boundary of the average range for this time of year, the EIA said. Oil inventories have dropped for five straight weeks, resulting in a reduction of 25 million barrels. Also, over the last four weeks oil imports averaged about 9.7 million barrels per day, down about 487,000 barrels per day compared to the same period a year ago.

U.S. housing starts decreased 3.3% in May, the U.S. Commerce Department announced Tuesday, as builders attempted to reduce supply amid the nation's worst housing slump in a generation.

Housing starts totaled a 969,000 annual rate in May, the Commerce Department said. It was the lowest housing start pace in 17 years.

Economists surveyed by Bloomberg News had expected housing starts to total a 985,000 annualized rate in May.

Further, housing starts are down 32.1% in the past year and single-family home starts are down 41.2%. Over the past four months, housing starts have averaged a 1.02 million annual pace.

Meanwhile, building permits, a measure of future construction, decreased 1.3% to a 969,000 annualized rate in May. Single-family permits decreased 4%. Building permits have declined 36.3% in the past year.

Economist Glen Langan told BloggingStocks Tuesday many potential homebuyers are remaining in wait-and-see mode, as the housing slump persists.

Home foreclosure activity jumped 48% in May compared to a year ago, as substantially more default notices, auction sales notices, and bank repossessions were reported than in the same month a year ago, research firm RealtyTrac announced Friday.

In May, one in every 483 U.S. households received a foreclosure notice, RealtyTrac said, adding that foreclosure activity increased in 40 of 50 states in the same period.

Foreclosure filings - - which include default notices, auction sales, and bank repossessions - - totaled 261,255 in May, a 7% increase from April and a 48% increases from a year ago, RealtyTrac announced.

Crude oil surged past $135 Wednesday after a weekly U.S. Energy Information Administration report indicated weekly oil inventories plunged 4.6 million barrels.

Economists surveyed by Bloomberg News had expected weekly oil inventories to decline by 1.5 million barrels. It was the fourth straight weekly decline for oil inventories.

The oil market, at least initially, interpreted this week's report as another bullish data point for oil, and looked past weekly increases in both gasoline and distillate supplies, which rose 1 million and 2.3 million barrels, respectively. Oil futures, up about $3.50 before the report rallied further -- rising $4.63 to $135.96 on the news in Wednesday morning trading.

The venerable George Bernard Shaw once observed that the United States and Britain are two nations separated by a common language.

Well, in the initial decade of the globalization era, one could argue that the United States and Britain are two nations united by a common housing slump.

That's because U.K. home prices plunged an alarming 2.5% in May 2008, Nationwide Building Society announced Thursday -- the largest drop since 1991.

The U.K.'s median home price declined to173,583 pounds or $342,774. Prices are now down 4.4% in the past 12 months, according to Nationwide, the U.K.'s fourth-largest lender. Further, property values have declined for seven straight months, the longest consecutive drop since 1992.

U.K. housing slump mirroring U.S.?

London-based economist Mark Chandler told BloggingStocks Thursday there are new data points each week that suggest that those who felt the United Kingdom's housing sector would fare better than the U.S.'s during the economic downturn, are wrong.

Crude oil surged past $132 Thursday after a weekly U.S. Energy Information Administration report indicated oil inventories plunged 8.8 million barrels, primarily due to an idiosyncratic event.

The EIA cautioned that the large drop in oil inventories was due to temporary delays in crude oil tanker off-loadings on the U.S. Gulf Coast.

Nevertheless, the oil market, at least initially, interpreted it as yet another bullish data point for oil, and oil futures quickly rose $1.87 to $132.90 per barrel in Thursday morning trading.

The other major energy commodities also surged after the weekly inventory report. Heating oil jumped 4 cents to $3.86 per gallon, unleaded gasoline added 7 cents to $3.51 per gallon, and natural gas increased 5 cents to $12.04 per million BTUs.

English writer and farmer Thomas Tusser said, "A fool and his money are soon parted."

Maybe one can modify the above for the early globalization era: "An oil bear and his money are soon parted."

Oil reversed course and closed sharply higher Wednesday, near $131 per barrel, after Morgan Stanley said Brent oil from the North Sea could easily reach $150 per barrel.

Oil had drifted to as low as $125.96 early in the session on the belief high oil / gasoline / diesel prices will reduce demand, globally. But that sentiment proved to be 'famous last words' after Morgan Stanley (NYSE: MS) co-head of global economics Richard Brenner said oil supply constraints remain a concern, juxtaposed against still-strong global demand, Bloomberg News reported Wednesday.

That was more than enough to send traders into buy-mode in the current market, oil reversed and surged higher to close at $130.97, up $2.12 per barrel.

U.S. new home sales unexpectedly rose 3.2% (PDF) to a seasonally adjusted, annualized pace of 526,000 in April 2008 -- the first rise in new home sales in six months, the U.S. Commerce Department announced Tuesday.

Economists surveyed by Bloomberg News had expected April 2008 new home sales to register a 522,000 annualized rate.

Nevertheless, sales are still down about 42% in the last 12 months.

Meanwhile, inventories dipped to a 10.6-month supply in April 2008 at the current sales pace, compared to an 11-month supply in March 2008 and a 9.8-month supply in February 2008.

Also, the median sales price increased 9.1% in April 2008 to $246,100.

Sales rose in three regions: Northeast, up 42%; West, up 8.3%; and the Midwest, up 5.8%. Sales fell 2.4% in the South.

Economic Analysis: Sales did nudge-up slightly in April 2008, but the key stats remains the large, 10.6-month supply of unsold new homes and the 42% decline in new home sales compared to a year ago. A normal, healthy market has a 3-4 month supply of new homes for sale, and that fact, combined with the large decline in year-over-year sales, suggests a market with scant demand. Investors / traders should also ignore the one-month rise in the median sales price: a trend takes at least 3-4 months to form, and the higher one-month median price jump could simply reflect a large number of lower-priced homes taken off the market, or not sold.

The U.S. housing sector has registered another ignominious statistic. Home prices in a 20-city sample plunged 14.4% in March 2008 (PDF), on a year-over-year basis, according to the S&P / Case-Shiller U.S. National Home Price survey released Tuesday. Meanwhile, prices in a 10-city survey plummeted 15.3%.

It was the largest decline in the survey's 20-year history, Case-Shiller said.

Economists surveyed by Bloomberg News had expected home prices in the Case-Shiller 20-city survey to decline 14.2% in March 2008 on a year-over-year basis.

The areas with the largest percentage declines were: Las Vegas, -25.9%; Miami, -24.6%, and Phoenix, -23.0%. Only one city in the survey -- Charlotte, N.C. -- appreciated, with prices there rising just a scant 0.8%.

Percentage price changes in other major U.S. cities were as follows: New York, -7.4%, Los Angeles, -21.7%, Chicago, -10.0%, Boston, -5.9%, San Francisco, -20.2%, Washington, D.C., -14.7%, Miami, -24.6%, and Seattle, -4.4%.

Economic Analysis: Another horrible U.S. housing sector statistic, and the sector remains in deep recession. Economists differ regarding whether the U.S. housing sector has bottomed: some see a housing recovery as early as Q4 2008, while others say it won't start until mid-2009. In either event, it's going to be a while before new home builders can resume typical building schedules and get out there and make some money -- a fact that suggests U.S. home prices are likely to continue to decline for at least the next two quarters, and probably longer.

Sales of existing homes in April 2008 fell 1.0%, to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Friday, as inventories of homes swelled to a 23-year high.

Economists surveyed by Bloomberg News had expected April 2008 existing home sales to total a 4.85-million annualized rate. The March 2008 sales rate was revised higher to a 4.94-million annualized rate.

Even more telling, inventories -- unsold homes and condominiums -- rose to an 11.2-month supply at the current sales rate. A typical, healthy housing market has a three to four month supply of unsold homes on the market.

Further, the inventory of single family homes rose to 10.7-month supply - - its highest level since 1985. Meanwhile, the inventory of condominiums increased to a 14.2-month supply.

Also, the median sales price for houses and condominiums fell to $202,300 in April 2008, an 8% decrease from the $219,900 median recorded a year ago.