US home sales fall to a six month low as activity dips

NEW HOME sales fell to a six-month low in the US last month, according to figures released yesterday by the Commerce Department.

The number of sales fell 2.3 per cent, from a seasonally adjusted 302,000 in July to 295,000 in August. That is the fourth consecutive monthly drop, leaving sales 6.6 per cent below April’s level.

More evidence of a slowdown came from the Chicago Fed’s national activity index, also released yesterday.

The index declined from +0.02 in July to -0.43 in August, indicating below-trend growth.

Growth may remain muted even when the recovery returns, the Fed’s James Bullard said yesterday.

“It is not reasonable to expect the economy to climb rapidly back to the 2007 Q4 peak – that was a bubble.”