U.S. economy shows mixed signs of recovery

The U.S. economy continued to show mixed signs of economic recovery with two measures of demand moving in opposite directions.

New home sales in the U.S. fell to the lowest level on record in February, the Commerce Department reported Wednesday.

Sales fell 2.2 per cent last month to a seasonally adjusted annual rate of 308,000. Many economists had expected a rise to 320,000.

The drop may have been accounted for by winter storms which kept buyers off the market but the weakness underscores the difficulties the American housing industry is facing as it tries to pull out of the worst slump in demand in decades.

It was the fourth consecutive month of declines and the worst showing on record dating back to 1963.

At the same time, a more hopeful sign came from orders for big-ticket manufactured goods in the U.S., which rose for a third consecutive month in February, bolstered by strong demand for commercial aircraft and machinery.

The Commerce Department reported Wednesday that orders for durable goods advanced 0.5 per cent, slightly lower than the 0.7 per cent gain that many economists had expected.

Demand for commercial aircraft rose by 32.7 per cent. That followed a 134.9 per cent rise in this volatile category in January. Excluding transportation, orders posted a 0.9 per cent increase, much better than the 0.6 per cent decline in January.

Motor vehicle sales fall

Motor vehicle sales fell 1.9 per cent. This is an improvement over  January, when that category fell 2.3 per cent.

The department also revised its number for durable goods sales in January upward, based on additional information, from an increase of 2.6 per cent to growth of 3.9 per cent. 

Ian Pollick, a portfolio strategist with TD Securities, said the durable goods numbers represented a "decent" report.

The upward revision in durable goods orders in January he said, "points to a strong momentum" for U.S. economic growth.