September 3rd, 2010 by admin

Fears of the US economy facing a double-dip recession were expressed after pending sales of previously owned US homes rebounded unexpectedly in July and new claims for jobless benefits fell last week.

The data released recently including sturdy sales from retailers in the US last month followed a report displaying a surprising gain in manufacturing and suggesting that the US economy has been able to retain some underlying strength.

From in.news.yahoo.com:

This is an economy that has hit a soft patch. It’s not an economy that appears to be heading towards a double-dip recession,” said Brian Levitt, an economist at OppenheimerFunds in New York.

Investors appeared to agree that fears of a double-dip recession might have been overdone as they sold U.S. government debt for a second straight day and bought stocks. The broad Standard & Poor’s 500 Index ended up 0.91 percent.

The National Association of Realtors’ Pending Home Sales Index, based on contracts signed, rose 5.2 percent in July from June. Analysts had expected the index, which leads actual sales by a month or two, to fall 1 percent.

Home sales have dropped sharply since a popular tax credit for home buyers ended in April and the surprise gain in pending sales raised hopes the sector could soon stabilize.

The minutes of the U.S. central bank’s last policy meeting showed that some policymakers believe that the outlook would have to deteriorate “appreciably” to spur fresh monetary support.

Tags: Home sales, recession, stocks, tax credit