More positive news for US economy

The Commerce Department has today revealed a rise in orders for US durable goods and an increase in new home sales in the world‘s largest economy.

Orders for US goods (expected to last several years) rose 4.9% in July - the most since July 2007 and exceeded analysts expectations of a 3% gain.

Orders for durable goods were boosted by the success of the US Government’s Car Allowance Rebate System (CARS), branded the “cash for clunkers” scheme.

This helped US car orders grow 0.9%, recovering from previous monthly falls in May and June.

In the meantime, the Commerce Department reported a rise in the purchase of new homes in the US, rising 9.6% in July, again exceeding analysts forecasts and the biggest rise in almost a year.

New home sales rose to a seasonally adjusted annual rate of 433,000 from an upwardly revised June rate of 395,000.

Sales are now up more than 30% from the record low in January, however, they are still off almost 70% from the peak of four years ago.

Today’s positive figures come just a day after the closely-monitored Consumer Confidence Index from the Conference Board business organisation grew to 54.1 from an upwardly revised 47.4 the previous month.

The reading exceeded market expectations but it is still well below the 90 mark - the minimum level associated with a healthy economy. Anything above the 100 mark indicates strong growth.

The Index is closely watched as personal spending accounts for more than two-thirds of US economic activity.

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