Economy Perks Up A Bit
Kurt Brouwer July 25th, 2008
We had two welcome pieces of positive economic news today. Such sightings are rare so I thought I would just point them out as told in this piece from Bloomberg [emphasis added]:
U.S. Economy: Orders Up, Home Sales Beat Forecast (Bloomberg, July 25, 2008, Courtney Schlisserman and Timothy R. Homan)
Orders for U.S. durable goods unexpectedly rose in June, and sales of new homes were higher than forecast, easing concern that the economic slowdown will worsen.
Bookings for goods made to last several years gained 0.8 percent and posted the first consecutive monthly rise since July 2007, the Commerce Department said today in Washington. New homes sold at an annualized pace of 530,000, exceeding the median forecast of 503,000 in a Bloomberg News survey. A private report showed consumer sentiment rose from a 28-year low.
Stocks rose and Treasuries fell after the reports indicated the economy accelerated in the second quarter from the weakest pace of growth in five years. Economists had forecast that the slowdown would worsen by year-end as the impact of tax rebates fades and as job losses and rising consumer prices force households to cut spending.
“At the end of the day, we are going to avoid a severe recession,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut.
The Reuters/University of Michigan final index of consumer sentiment increased to 61.2 in July from 56.4 in June. The measure averaged 85.6 in 2007 and is up from a preliminary reading of 56.6 in early July…
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