26
Aug
More signs of US economic growth
US durable goods orders and new home sales both soared last
month, the latest positive indications of the state of the world's
largest economy. Orders for goods expected to last more than three
years increased 4.9% in July, beating analyst expectations of a 3%
gain, said the Commerce Department. Durable goods orders were
lifted by the popularity of the government's "cash for clunkers"
car scrappage scheme. This helped US car orders rise 0.9%,
recovering from June and May falls. At the same time, the annual
rate of sales of new US homes rose 9.6% last month, also ahead of
market targets. This was the biggest rise in sales of new houses
since September last year.
Boeing boost
The increase in durable goods orders was led by the commercial
aviation sector, which pushed total transportation equipment orders
up 18%. July's 107% increase in demand for civilian aircraft was
thanks primarily to Boeing, which saw its largest increase in
monthly orders since August last year. The 0.9% increase in car
orders compared with June's 0.2% fall, and the sharp 8.4% decline
in May. July's rise in auto orders was lifted by the success of the
"cash for clunkers" or Car Allowance Rebate Scheme, whereby owners
of old cars were given up to $4,500 when they traded in their
vehicle for a new model. The US Transportation Department said on
Wednesday that the scheme, which ran from 1 July to 25 August,
created 700,000 new car sales. It added that the total amount of
rebates paid out was $2.88bn (£1.8bn). The White House in turn
estimates that the scheme will create or save 42,000 US jobs in the
second half of 2009, and boost economic growth between July and
September by 0.3% to 0.4%.
Upbeat figures
Durable goods orders excluding transportation items rose 0.8%,
which was the third rise in the past four months, and followed a
revised 1.3% fall in June. Sales of new US homes rose to a
seasonally adjusted annual rate of 433,000 in July, up from 395,000
in June, said the Commerce Department. Although this was a 9.6%
rise from the month before, sales were still 13% lower than July
2008. The latest upbeat official figures come a day after the
closely-watched Conference Board Consumer Confidence Index rose by
more than expected this month, while a separate study said the rate
of decline in US house prices slowed in July.
BBC News. (2009). More signs of US economic growth. [Online].
Available from: http://news.bbc.co.uk/1/hi/business/8222879.stm
Accessed on 26th August 2009.