Existing-home sales increased by 0.6%, after rising 0.5% in October, the
National Association of Realtors said. The back-to-back increases were the first
since March and April 2005. In a separate report, the National Association of
Purchasing Management Chicago said its index of area business activity rose
to 52.4 in December on a seasonally adjusted basis, a level that reflects expansion.
Also, consumer confidence this month shot higher. Economists and others weigh
in on the data.
All three indicators firmer than generally expected, revealing
a rebound in industrial conditions in the Midwest, a firming in consumer confidence
and labor market attitudes, and stabilization in sales of existing homes. –
Goldman Sachs Economics
Consumer confidence has recovered sharply in the second half
of 2006, even in the face of a substantial housing correction, helped by solid
labor market conditions and a plunge in gas prices. While we do not put great
stock in the confidence data, they are consistent with our expectation that
the downturn in the housing sector will not trigger a major retrenchment in
consumer spending. — Michelle Girard, RBS Greenwich Capital
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