Slow recovery: New U.S. home sales fell slightly last month, in another sign that the housing market’s recovery is likely to be gradual and prolonged. The Commerce Department says sales dropped 0.6% in May to a seasonally adjusted annual rate of 342,000, from a downwardly revised April rate of 344,000. Sales were down nearly 33% from May last year. The results fell far short of economists’ forecast of a 360,000 sales pace, according to Thomson Reuters. However, many analysts think new home sales hit bottom in January and will increase gradually as the economy gathers steam. The median sales price of $221,600 was up 4.2% from April, but down 3.4% from a year ago.
Light at end of tunnel: Orders to U.S. factories for big-ticket manufactured goods rose sharply for a second straight month in May, and a key indicator of business investment surged by the largest amount in nearly five years. The Commerce Department says demand for durable goods rose 1.8% last month, far better than the 0.6% decline that economists expected. It also matched the rise in April, with both months posting the best performance since December 2007, when the recession began. Orders for nondefense capital goods, a key proxy for business investment plans, jumped 4.8%, the biggest increase since September 2004. That could signal that businesses have stopped trimming their investment spending. The back-to-back monthly gains in orders for durable goods, or items expected to last at least three years, were further evidence that a dismal stretch for U.S. manufacturers may be nearing an end. Still, analysts say any sustained rebound is still months away.
