New-Home Sales, Other Key Indexes Fall in September : Economy: The 1% drop nationwide--including an 8.4% decline in the West--suggests a still sluggish recovery.

In one of the last government-issued reports before a presidential election that has been dominated by economic issues, the Commerce Department said Friday that sales of new homes across the nation dropped 1% last month.

The September drop in new-home sales--including an 8.4% decline in the West--surprised some analysts, who continued to hope that the lowest mortgage rates in two decades would spark an increase in purchases. But the trend was consistent with other recent economic data suggesting a still sluggish economic recovery.

The Conference Board said Friday that its “help-wanted” index--which measures the amount of ads placed in 51 major newspapers by employers seeking help across the country--dropped to 89 last month from 93 in August. Earlier in the week, the board issued a report saying that consumer confidence about the future of the economy has dropped to its lowest level since February.

Also Friday, a survey of Chicago-area purchasing managers, which is a key barometer for the nation’s economy, showed an abrupt fall in October manufacturing after seven months of across-the-board growth. On Wednesday, the government reported durable goods orders down 0.4% in September.

One optimistic report from the Commerce Department this week showed that the nation’s economy grew by a brisk 2.7% in the third quarter. But consumer choices appear still to be governed by their uncertainty that a definite turnaround is in progress.

Clearly, housing, which is crucial to a sustained economic recovery, is being hurt by would-be buyers sitting on the sidelines, concerned about their jobs and the economy.

“A lot of people are nervous, and nervous people don’t buy houses,” said Jay Shackford, vice president of the National Assn. of Home Builders.

Still, some analysts said that the 1% August-to-September drop in new-home sales wasn’t as bad as it seemed because the Commerce Department had sharply revised its sales figures for August.

Originally, the government said that sales in August had plunged 6.1% from July. But Friday’s report revised those figures to show an actual 1.6% sales gain.

“Every month for the past year, we have seen these numbers revised upward, and we’ll see it again for September,” said David Berson, an economist with the Federal National Mortgage Assn.

Berson called the September sales figures “respectable,” noting that it was the third straight month that the annual sales rate topped 600,000 units. New homes were sold at a seasonally adjusted annual rate of 617,000 units last month, compared to August’s revised 623,000-unit sales rate.

California’s housing market remains one of the nation’s weakest and probably hasn’t hit bottom yet, said Frederick Cannon, chief economist for Bank of America.

New Home Sales

Seasonally adjusted annal rate, thousands of units

Sept., ‘92: 617

Aug., ‘92: 623

Sept., ‘91: 499

Source: Commerce Department