New US home sales hit a new record in October, while durable goods orders rose by 3.4 percent as aircraft demand surged, but non-transportation orders were barely changed, data on Tuesday showed.
While consumers may not have splashed out on big-ticket items in October, separate reports showed confidence was almost back to its pre-Katrina levels in November and the first leg of the holiday shopping period got off to a strong start.
The data indicated the US economy was still growing at a good clip and suggested that the Federal Reserve was likely to continue its policy of gradually raising interest rates, at least in the near term.
"Clearly today's numbers show that the economy is still healthy and that the Federal Reserve probably will still be concerned about inflation for at least a couple more months," said Gary Thayer, chief economist, A.G. Edwards and Sons, in St. Louis.
The Commerce Department reported that new home sales rose by 13 percent in October to a record 1.424 million annual rate, apparently contradicting other signs that the US housing market may be coming off the boil.
Wall Street economists had expected to see sales slow to a 1.20 million pace from the 1.22 million rate in September.
But the report also showed that home prices were not rising at quite the same pace - up 1.6 percent - and the number of homes still on the market reached a record 496,000.
"The demand for new housing surged, likely because rising mortgage rates motivated some potential homebuyers to accelerate their buying decisions," said Steven Wood, economist at Insight Economics in Danville, California.
A government report earlier showed new orders for durable goods - expensive items intended to last three years or more - rose by 3.4 percent in October, outstripping forecasts for a rise of 1.1 percent. Leading the overall increase were transportation orders, including a 140.4-percent increase in defence aircraft orders, and a 50.4-percent rise in non-defence aircraft orders, although orders for motor vehicles fell by 2.2 percent.
September durable goods orders were upwardly revised to show a 2.0 percent decline, from a 2.4 percent fall.
October orders outside the transportation sector rose by just 0.3 percent, falling short of forecasts for 1.0 percent increase.
Non-defence capital goods orders excluding aircraft, seen as an proxy for business spending plans, rose 1.3 percent. Manufacturing orders rose 5.0 percent.
Communications equipment orders rose 6.4 percent, while demand for machinery rose 2.1 percent. Meanwhile, orders for computers and related products tumbled 1.7 percent after a 6.6 percent drop in September.
Defence capital goods orders rose by 52.8 percent, the biggest gain since February 2002.
A separate report showed US consumers overcame much of their pessimism after Hurricanes Katrina and Rita as gasoline prices are well off the highs seen after the storms hit in late August and early September. The Conference Board reported that its November index of consumer confidence rose to 98.9, from an upwardly-revised 85.2 in October, beating Wall Street forecasts for a rise to 90.0.
Meanwhile, US chain store retail sales - which economists watch closely as the holiday shopping season kicks in - rose last week compared to the same week a year ago, reports showed.
The International Council of Shopping Centers and UBS said in a joint report that retail sales grew 5.1 percent in the week ended November 26 compared with the same week a year earlier, the strongest year-over-year performance since June 12, 2004. But they were down 0.7 percent compared to the previous week. A separate report by independent firm Redbook Research showed sales in November to date were up 0.3 percent compared with the same period in October, and were up 4.4 percent on a year-over-year basis for the week.
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