Improvement in US Manufacturing Activities to be Marred by Volatility: RHB

October saw a 6.2% m/m rebound in US new home sales, as compared to a 2.4% decline in September. This marked the first sales increase in three months, indicating that buyers made a rush to capitalize on the government’s tax incentives before they expired. Moreover, lower mortgage rates and cheaper pricing also contributed to the sales growth, according to RHB. Additionally, new home sales in October have risen for the first time in four years, indicating a gradual turnaround in the housing sector.

A 0.6% m/m decline in new orders in the US durable goods in October marked the third decline in five months. RHB said this suggested a gradual improvement in manufacturing activities, with volatility marking the entire phase. Meanwhile US personal consumption expenditure rose by 0.7% m/m in October, reflecting the fifth increase in six months. This indicated that consumers continued to spend, even after the end of the government’s cash-for-clunkers program.