More signs of US economic growth

The 'cash for clunkers' deal proved popular

US durable goods orders and new home sales both soared last month, the latest positive indications of the state of the world's largest economy.

Orders for goods expected to last more than three years increased 4.9% in July, beating analyst expectations of a 3% gain, said the Commerce Department.

Durable goods orders were lifted by the popularity of the government's "cash for clunkers" car scrappage scheme.

This helped US car orders rise 0.9%, recovering from June and May falls.

At the same time, the annual rate of sales of new US homes rose 9.6% last month, also ahead of market targets.

This was the biggest rise in sales of new houses since September last year.

Boeing boost

The increase in durable goods orders was led by the commercial aviation sector, which pushed total transportation equipment orders up 18%.

Increased aircraft orders led the rise

July's 107% increase in demand for civilian aircraft was thanks primarily to Boeing, which saw its largest increase in monthly orders since August last year.

The 0.9% increase in car orders compared with June's 0.2% fall, and the sharp 8.4% decline in May.

July's rise in auto orders was lifted by the success of the "cash for clunkers" or Car Allowance Rebate Scheme, whereby owners of old cars were given up to $4,500 when they traded in their vehicle for a new model.

The US Transportation Department said on Wednesday that the scheme, which ran from 1 July to 25 August, created 700,000 new car sales.

It added that the total amount of rebates paid out was $2.88bn (£1.8bn).

The White House in turn estimates that the scheme will create or save 42,000 US jobs in the second half of 2009, and boost economic growth between July and September by 0.3% to 0.4%.

Upbeat figures

Durable goods orders excluding transportation items rose 0.8%, which was the third rise in the past four months, and followed a revised 1.3% fall in June.

US home sales have seen their biggest rise in 10 months

Sales of new US homes rose to a seasonally adjusted annual rate of 433,000 in July, up from 395,000 in June, said the Commerce Department.

Although this was a 9.6% rise from the month before, sales were still 13% lower than July 2008.

Analysts broadly welcomed the latest durable goods orders and new home sales figures, but cautioned that the US economy still faced a difficult recovery.

"Big ticket items are displaying very normal recovery patterns, signalling that the early phase of this recovery may be stronger than people are anticipating, it doesn't mean it will be sustained," said Stephen Gallagher, chief US economist at Societe Generale in New York.

The latest upbeat official figures come a day after the closely-watched Conference Board Consumer Confidence Index rose by more than expected this month, while a separate study said the rate of decline in US house prices slowed in July.