U.S. News: Mixed Data Show Recovery's Rocky Path
New-home sales fell but orders for durable goods rose in September, according to two government reports released Wednesday that show the economy remains on a wobbly path upward.</br></br>Sales of new homes fell 3.6% in September as the effect of the federal government's tax credit for first-time home buyers faded, the Commerce Department said Wednesday. A separate Commerce report showed that orders for big-ticket items such as cars and washing machines increased 1% in September and that a key measure of business spending rose, suggesting consumer demand and business confidence are inching back.</br></br>The recovery thus far has been heavily supported by federal money, casting a question mark over the economy's underlying strength as government support dwindles. A better picture of the economy's health comes Thursday, when third-quarter gross domestic product is released. Economists forecast growth of about 3% after four consecutive quarters of contraction.</br></br>The increase in orders for durable goods -- products designed to last more than three years -- was the second in three months. Orders of so-called core durable goods, a category that excludes orders for civilian planes and defense capital goods, also returned to growth, increasing 0.5% in September after a 0.4% drop in August.</br></br>Businesses continued to reduce their inventories of durable goods, but have eased up from the deep reductions over the past few months. Inventories decreased 1% in September, slower than the 1.5% pace in August. "While inventories will continue to decline in the months ahead, the rate of liquidation is likely to moderate," Joshua Shapiro, chief U.S. economist at research firm MFR Inc., wrote in a note to clients.