US goods orders unexpectedly jump

Despite the gain, durable good orders are still much lower than in the past

US orders for long-lasting manufactured goods rose unexpectedly in May, figures show, raising hopes that the worst of the recession may now have passed.

New orders for durable goods such as household appliances and aircraft rose 1.8% last month from April, according to the Commerce Department.

Economists had expected orders to drop by 0.9%.

Durable goods have gained in three of the past fourth months. Orders in April were also revised higher.

The data "is a sign that the economy may be close to bottoming out," said Paul Ashworth, an economist at Capital Economics.

"The question now is how strong will the recovery be when it arrives, particularly after the short-term boost from pent up demand runs its course?"

Since the start of the year, durable goods orders are still down 26.8% from the same time in 2008, which highlights the severity of the continued global economic downturn.

Home sales

However, the latest set of house price data indicated that the US housing market remains weak.

The Commerce Department said that sales of new US homes fell slightly in May, dropping by 0.6% to 342,000 from 344,000 in April.

The median sales price was up 4.2% from April to $221,600, but down by more than 3% from the same month last year.

New home sales were down nearly 33% from May last year.