Home sales and orders for durable goods are likely to have risen in August, extending gains that have signaled the US is emerging from the worst recession since the 1930s, economists said before reports this week. Purchases of new and existing houses climbed to a combined 5.79M annual pace last month, the most in almost two years. Bookings for durable goods likely rose 0.4%, the fourth advance in five months. Housing and manufacturing, two areas that deepened the slump, are stabilizing as stimulus measures such as credits to first-time home buyers and “cash for clunkers” revive demand. While acknowledging the economy is healing, analysts project Ben Bernanke and his colleagues at the Federal Reserve will commit to keeping interest rates low when they meet this week. Bernanke, the US Fed’s chairman, last week said the recession “is very likely over.” The central bank will maintain the benchmark interest rate near zero at least through the middle of next year, according to the median estimate of economists surveyed earlier this month. The policy-making Federal Open Market Committee’s announcement is due Sept. 23. Existing-home sales, which make up more than 90% of the market, probably rose 2.1% to a 5.35M unit pace, a fifth consecutive, gain, economists forecast before the Sept. 24 report from the National Association of Realtors. As of July, purchases were down 28% from the record reached in September 2005. Data on new houses, due the following day from the Commerce Department, will probably show sales rose 1.6% to a 440,000 rate. They reached a record-low rate of 329,000 in January 2009 The Obama administration’s US$8,000 tax credit for first- time buyers, combined with the plunge in prices as foreclosures climbed, have helped lift sales this year, prompting builders such as Toll Brothers Inc. to get back to work. Housing starts rose to a nine-month high in August, the Commerce Department reported last week, indicating residential constriction may soon add to growth after subtracting from gross domestic product since 2006. The projected gain in orders for goods meant to last several years would follow a 5.1% surge in July that was the biggest gain in two years. Excluding transportation equipment such as cars and aircraft, orders probably rose 1%, economists forecast the Commerce Department will report on Sept. 25. Carmakers including General Motors Co. and Ford Motor Co. are planning to keep boosting output through the second half of Y 2009 to rebuild depleted inventories. In another sign the economy is recovering, the index of leading economic indicators are expected to have risen in August for a 5th consecutive month, economists forecast the Conference Board will report tomorrow. The increases mark the gauge’s best performance since 2004. Consumers are becoming less pessimistic. The Reuters/University of Michigan index of consumer sentiment probably rose to 70.5 this month from 65.7 in August, according to economists’ forecasts before the Sept. 25 report.
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