Pending sales of previously owned US homes rebounded unexpectedly in July and new claims for jobless benefits fell last week, helping dampen fears the economy could face a double dip recession.
The data yesterday, including sturdy sales from US retailers last month, followed a report on Wednesday showing a surprising gain in manufacturing activity and suggested the economy retained some underlying strength.
Investors appeared to agree earlier fears of a double-dip recession might have been overdone as they sold long-dated US government bonds and bought some stocks.
The National Association of Realtors’ Pending Home Sales Index, based on contracts signed, rose 5.2 per cent in July from a month earlier. Analysts had expected the index, which leads actual sales by a month or two, to fall one per cent.
Home sales have dropped sharply since a popular tax credit for home buyers ended in April and the surprise gain in pending sales raised hopes the sector could soon stabilise.
A separate report from the Labor Department showed initial claims for state unemployment benefits dropped for a second straight week last week, slipping 6,000 to 472,000.