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Reuters Home sales hit new record By Amanda Cooper 2 hours, 12 minutes ago NEW YORK (Reuters) - New US home sales hit a new record in October, whi le durable goods orders rose by 34 percent as aircraft demand surged, b ut non-transportation orders were barely changed, data on Tuesday showed .
While consumers may not have splashed out on big-ticket items in October, separate reports showed confidence was almost back to its pre-Katrina l evels in November and the first leg of the holiday shopping period got o ff to a strong start.
Federal Reserve was likely to continue its policy of gradually raising interest rates, at least in the near term. "Clearly today's numbers show that the economy is still healthy and that the Federal Reserve probably will still be concerned about inflation for at least a couple more months," said Gary Thayer, chief economist, AG Edwards and Sons, in St.
news) rose to a nine-month high afte r the home sales and confidence reports. Treasury prices fell, leaving the yield on the benchmark 10-year note at 444 percent, up 30 basis points on the day, but still near one-month l ows.
Wall Street economists had expected to see sales slow to a 120 million p ace from the 122 million rate in September. But the report also showed that home prices were not rising at quite the same pace -- up 16 percent -- and the number of homes still on the mark et reached a record 496,000. "The demand for new housing surged, likely because rising mortgage rates motivated some potential homebuyers to accelerate their buying decisions ," said Steven Wood, economist at Insight Economics in Danville, Califor nia. However, Wood noted that inventories of unsold new homes were also climbi ng. "Moreover, despite the huge increase in sales, home price momentum has sl owed as home builders are beginning to use discounts to motivate buyers, " he said. AIRCRAFT ORDERS PUFF UP DURABLES A government report earlier showed new orders for durable goods -- expens ive items intended to last three years or more -- rose by 34 percent in October, outstripping forecasts for a rise of 11 percent. Leading the overall increase were transportation orders, including a 140. "It looks sort of in line with expectations, with some strength -- for ex ample a rebound in communications and machinery, but also some disturbin g continued weakness in the computer sector," said David Wyss, chief eco nomist at Standard & Poor's in New York. September durable goods orders were upwardly revised to show a 20 percen t decline, from a 24 percent fall. October orders outside the transportation sector rose by just 03 percent , falling short of forecasts for 10 percent increase. Non-defense capital goods orders excluding aircraft, seen as an proxy for business spending plans, rose 13 percent. Communications equipment orders rose 64 percent, while demand for machin ery rose 21 percent. Meanwhile, orders for computers and related produc ts tumbled 17 percent after a 66 percent drop in September. A separate report showed US consumers overcame much of their pessimism after Hurricanes Katrina and Rita as gasoline prices are well off the hi ghs seen after the storms hit in late August and early September.
The International Council of Shopping Centers and UBS said in a joint rep ort that retail sales grew 51 percent in the week ended November 26 com pared with the same week a year earlier, the strongest year-over-year pe rformance since June 12, 2004. But they were down 07 percent compared t o the previous week. A separate report by independent firm Redbook Research showed sales in No vember to date were up 03 percent compared with the same period in Octo ber, and were up 44 percent on a year-over-year basis for the week.
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New home sales hit a new record in October, while durable goods orders rose by 34 perc ent as aircraft demand surged, but non-transportation orders were barely changed, data on Tuesday showed.
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