Today’s economic indicators all point up:
— New Home Sales: There was a 15.6 percent surge in sales of new homes in January from December, the Census Bureau and Department of Housing and Urban Development say. That was the biggest one-month gain in nearly 20 years, according to The Associated Press. At an annual rate of 437,000, the sales pace was the strongest since July 2008. The data are another in a series of signs in recent months that the previously weak housing sector is now one of the economy’s bright spots.
— Consumer Confidence: “The shock effect” caused by last year’s “fiscal cliff” debate and this year’s increase in payroll taxes apparently abated this month because consumer confidence rebounded, the private Conference Board says. Its widely watched consumer confidence index rose to 69.6 from 58.4 in January.
— Bernanke Sees Growth: In the first of two days of congressional testimony this week, Federal Reserve Chairman Ben Bernanke told lawmakers that even though economic growth paused in fourth-quarter 2012, “available information suggests that economic growth has picked up again this year.” According to the AP, Bernanke is basically saying that “the Federal Reserve’s low interest-rate policies are providing key support for an economy still struggling with high unemployment.” And, he is “signaling that the Fed’s efforts to keep borrowing costs low will continue.”
Bernanke is also giving Congress a warning, though. The so-called sequester — about $85 billion worth of automatic spending cuts that would begin to kick in this Friday — would put a “significant … near-term burden on the [economic] recover,” he says.
“To address both the near- and longer-term issues, the Congress and the Administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term but more substantially in the longer run. Such an approach could lessen the near-term fiscal headwinds facing the recovery while more effectively addressing the longer-term imbalances in the federal budget.”
Wall Street seems to like what it’s hearing today. Though stock markets overseas were down earlier today, the Dow Jones industrial average and other U.S. indexes are on the rise.