Wednesday, 24 June 2009

US existing home sales and eurozone PMI rise

The global economy continues to show signs that it is gradually turning around.

Reuters reports a rise in US existing home sales.

Sales of previously owned U.S. homes rose for a second straight month in May but were weaker than expected, adding to growing fears of an anemic economic recovery from a deep recession...

The [National Association of Realtors] said sales climbed 2.4 percent last month to an annual rate of 4.77 million units. While that pace was below market forecasts it was the second straight month sales had risen, for the first back-to-back gain since September 2005.

Despite signs the market is stabilizing, the NAR said the median national home price fell 16.8 percent in May from a year earlier, the third-largest drop on record.

A separate government report on Tuesday showed home prices fell 6.8 percent year-on-year in April after dropping 7.3 percent the previous month.

Other data on the US economy on Tuesday also indicate improvement.

A monthly survey of manufacturers from the Federal Reserve Bank of Richmond showed factory activity in the U.S. mid-Atlantic states quickened in June compared with May. However, manufacturers' outlook for the next six months softened, signaling conditions remain fragile...

Separately, U.S. chief executives were less pessimistic about the economy in the second quarter but still planned to cut jobs and capital spending, according to a Business Roundtable survey released on Tuesday.

There were also some signs of improvement from Europe, as Bloomberg reports.

Europe’s manufacturing and service industries contracted at the slowest pace in nine months in June, adding to signs the recession is bottoming out.

A composite index of both industries for the 16 euro nations rose to 44.4, the highest since September, from 44 in May. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates a contraction. Economists forecast an increase to 44.9, according to the median of 12 estimates in a Bloomberg News survey...

Markit’s manufacturing index rose to 42.4 this month from 40.7 in May, according to today’s report. The services index fell to 44.5 from 44.8.

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