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US housing market improves but consumer confidence hit

US HOME sales rose for the first time in almost three years in May but ongoing weakness in the jobs market hit July consumer confidence hard, data showed yesterday. <br /><br />The S&amp;P/Case-Shiller composite-20 index rose 0.5 per cent month-on-month in May, which saw the annual decline moderate to 17.1 per cent. But these figures are not seasonally adjusted and prices tend to rise in May, say analysts. <br /><br />ING&rsquo;s Dimitry Fleming said: &ldquo;While sales may have already found a trough, we do not expect a bottom in prices before mid-2010. The level of unsold stock is simply still too high to expect price stability in the near term.&rdquo;<br /><br />For a rebound in the US housing market, consumer confidence needs to improve, but policymakers will draw little comfort from the second consecutive monthly fall in the Conference Board measure of consumer confidence. July consumer confidence dropped by more than expected to 46.6 from 49.3 because of deteriorating conditions in the labour market and higher petrol prices.<br /><br />But while unemployment is still rising, Federal Reserve official Charles Plosser said on Monday that the US central bank may have to start raising interest rates.