New housing data bolster outlook for US

By Lucia Mutikani ,Reuters

WASHINGTON — New U.S. home sales fell in January but upward revisions to the prior months’ data and a drop in the supply of properties on the market added to signs of a budding housing recovery. In a further boost to the economy, a separate report on Friday showed U.S. consumer confidence hit its highest point in a year this month despite a strong rise in gasoline prices. “We are guardedly optimistic that we may be at an important turning point for both the economy and the housing sector,” said Millan Mulraine, a senior macro Strategist at TD Securities in New York.

The Commerce Department said sales of new single-family homes slipped 0.9 percent last month to a seasonally adjusted 321,000-unit annual rate. However data for October, November and December were revised to show a much higher sales pace than previously reported, giving the report a stronger tone and putting January’s figure above economists’ expectations Sales last month rose briskly in the Northeast and South but fell sharply in the Midwest and the West. A slew of recent data has led economists to lay aside concerns that the economy would slow abruptly at the start of this year. The U.S. unemployment rate hit a three-year low last month, manufacturing has picked up and the housing sector is stirring. The brighter economic signs have helped lift the spirits of U.S. households. The Thomson Reuters/University of Michigan’s final index of consumer sentiment in February edged up to 75.3, the highest since February last year, from 75 in January. The rise in confidence came even as Americans faced higher prices for gasoline. Prices have jumped 8.8 percent since the start of this year, according to the Energy Information Agency, topping an average of US$3.65 a gallon in the week through Monday. The Obama administration is weighing the circumstances that could warrant tapping the nation’s strategic oil reserve, aware that supply disruptions from Iran could harm the global economy, Treasury Secretary Timothy Geithner said on Friday. “There is a case for the use of the reserve in some circumstances and we will continue to look at those and evaluate that carefully,” Geithner said on CNBC television.