More positive news from the US and Europe

Yesterday's news shows that there is still strength in the US economy. Reuters covers the reports on durable goods orders:

Durable goods orders rose 6.1 percent, the largest rise since May 2005, the Commerce Department said. Economists polled by Reuters had expected a smaller 1.6 percent increase in durable goods orders in March...

Even when transportation orders were stripped out, orders for durable goods...rose 2.8 percent...

In addition, February durable goods orders were revised higher, to a 3.4 percent gain from the previously reported 2.7 percent rise...

Orders for non-defense capital goods excluding aircraft, a proxy for business spending, gained 3 percent in March, twice the 1.5 percent climb expected by analysts.

...and housing:

Sales of new U.S. homes rose a much larger-than-expected 13.8 percent in March to a 1.213 million unit annual rate, the biggest one-month gain since April 1993...

The median home price slipped 2.2 percent from a year earlier to $224,200, the first year-over-year decline since December 2003, the Commerce Department said. Also, the March sales pace was down 7.2 percent from March 2005.

Inventories increased as well as new homes available for sale at the end of March reached a high of 555,000.

A separate report showed U.S. mortgage applications fell for a third consecutive week, with demand for home purchase loans falling to its lowest level since November 2003 despite a drop in interest rates, an industry trade group said.

Yesterday also saw the Federal Reserve release its Beige Book. The report noted that "economic activity continued to expand in March and the first half of April". It also noted some tightness in labor markets and rising input costs, but that there was little pickup in the pace of raises and businesses had limited success in raising their selling prices.

The news from Europe was also good. While industrial production was flat in February, industrial new orders were up by 2.7 percent in February in the euro zone and by 0.5 percent in the EU25.

In the UK, strong growth in industrial output offset a sharp slowdown in the services sector to help bring first-quarter GDP growth to 0.6 percent, the same as in the last three months of 2005. The annual rate of growth edged up to 2.2 percent.

In Germany, following the report of a rise in business confidence the previous day comes a report of a rise in consumer confidence.

German consumer confidence is rising to levels not seen in years as optimism about the outlook for Europe's biggest economy eases a chronic unwillingness to spend, a closely watched survey showed Wednesday.

The GfK research group's forward-looking consumer climate indicator rose to 5.5 points for May, up from April's reading of 5.3. This month's figure was revised up from an initial estimate of 5.1.