US shoppers feeling confident as new home sales stage recovery

Chris Papadopoullos
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US CONSUMER confidence rose slightly in May, while sales of new homes in the world’s biggest economy surged, according to figures published yesterday.

The consumer confidence index, published by the Conference Board, edged up to a score of 95.4 from April’s 94.3.

“Most confidence indicators have fallen back over the past few months, but remain at levels that historically have been consistent with stronger real consumption growth than we have actually seen in recent months,” said economist Paul Ashworth from Capital Economics.

Meanwhile, the Commerce Department said new home sales increased to an annualised rate of 517,000 in April from March’s 484,000.

The annualised rate is the number of houses that would be built in a year if the trend in one month was continued. The figure takes new home sales a step closer to the kind of levels seen before the financial crisis, when they were regularly in excess of 800,000.

“The improved selling rate for new homes, relatively tight supply, and rising home prices should result in a pickup in housing construction in the months ahead,” said John Ryding from RDQ Economics.

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