US existing home sales jump, eurozone PMI hits 50

Friday's economic reports show that the global economy remains on track for recovery.

In the US, Bloomberg reports that existing home sales jumped to a two-year high in July.

Purchases climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007, the National Association of Realtors said today in Washington. The gain was the biggest since records began in 1999. The median price fell 15 percent.

In the euro region, Bloomberg reports that several purchasing managers' indices have crossed the 50 mark.

German services and French manufacturing unexpectedly expanded in August, signaling a pick- up in domestic demand in Europe’s largest economies is helping lift the region out of the worst recession in six decades.

An index of the German services industry rose to 54.1 this month from 48.1 in July, Markit Economics said today, citing its purchasing managers’ survey. The French manufacturing index increased to 50.2 in August from 48.1 in the prior month. A reading above 50 indicates expansion. Economists forecast both indexes would remain below 50, the median estimates in Bloomberg surveys showed. A composite index of both industries for the 16 nations sharing the euro increased to 50 from 47 in July.

Despite the consistently positive data flow recently, officials at the central bankers’ symposium in Jackson Hole maintained a cautious tone. From Bloomberg:

Federal Reserve Chairman Ben S. Bernanke and European Central Bank President Jean-Claude Trichet said the world economy is pulling out of its deepest slump since the 1930s while cautioning that threats to a recovery remain.

“Prospects for a return to growth in the near term appear good,” while “critical challenges remain,” including possible further losses for financial firms, Bernanke said today. Trichet said the presence of “green shoots” isn’t enough for him to declare the recovery sustainable and that policy makers “have an enormous amount of work to do.”