A number of indicators released Tuesday point to underlying strengths in the U.S. economy, after markets were buffeted the past few days by fears about the Federal Reserve withdrawing stimulus and headwinds from overseas. Durable goods orders, house sales and prices, and consumer confidence indices all beat expectations.
New factory orders for durable goods increased by 3.6 percent in May, according to the Census Bureau. The Census Bureau also reported a 2.1 percent increase in new home sales in May, higher than expected. The Case-Schiller home price index showed improvements in the housing market as well. Updated for April, the index showed a year-over-year price increase of 12.1 percent, and the highest monthly gains in the history of the index, according to economist Mark Perry.
Consumer confidence also increased for the third consecutive month and reached its highest level since January 2008, before the financial crisis, as reported by the group that conducts the survey, the Conference Board.
Stock markets were up only modestly after the spate of good economic news. Nevertheless, the data might provide reassurance that the U.S. economy will continue to expand despite uncertainty about monetary policy and other “headwinds,” as President Obama and Federal Reserve Chairman Ben Bernanke have termed possible economic problems, suppressing growth. A steadily improving housing market, in particular, points to a real if fragile recovery.