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Continued: Rising consumer confidence, more home sales, higher prices signal stronger US economy

  • Article by: CHRISTOPHER S. RUGABER , AP Economics Writers
  • Last update: June 25, 2013 - 3:55 PM

Even so, Mark Vitner, an economist at Wells Fargo, said the reports point to underlying strength that should enable the economy to withstand jittery financial markets.

"The economy is strong enough now that it can handle a couple of rough days on Wall Street," Vitner said.

The weakest part of the economy this year has been manufacturing, which has been held back by a recession in Europe and tepid growth in other overseas markets. But factory activity may start to rebound, according to a report from the Commerce Department. The department said orders for durable goods rose 3.6 percent.

Most of the increase was due to commercial aircraft orders, which tend to fluctuate sharply from month to month. Still, businesses also ordered more computers, communications equipment, machinery and metals.

As a result, a category of orders that's viewed as a proxy for business investment plans — which excludes the volatile sectors of transportation and defense — rose 1.1 percent. That matched similar gains in April and March. This category hadn't risen for three straight months since 2011.

Paul Ashworth, chief U.S. economist at Capital Economics, said he still thinks economic growth is slowing in the April-June quarter to an annual rate below 2 percent. That would be down from a 2.4 percent annual rate from January through March.

But Ashworth said the pickup in orders should help drive a stronger economy in the July-September quarter. He said growth could exceed an annual rate of 2.5 percent in the final three months of the year.

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