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Home sales rise in December

Published 01/26/2009, The Dickinson Press

A private research group's monthly forecast of economic activity rose unexpectedly in December, mostly because the flood of federal bailouts increased the money supply. Separately, existing home sales rose 6.5 percent in December to an annual rate of 4.74 million units, as the median home sales price plunged to $175,400, down 15.3 percent from $207,000 a year ago. The decline is the largest year-over-year drop on records going back to 1968. The New York-based Conference Board's monthly forecast of economic activity increased 0.3 percent in December. Economists surveyed by Thomson Reuters had expected a 0.3 percent decline. The group's index of leading economic indicators had fallen 0.4 percent in November and a revised 1.0 percent in October. The index is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits, average weekly manufacturing hours and initial claims for unemployment benefits. With most components falling steeply, the Conference Board said unemployment could rise to 9 percent from 7.2 percent as the country remains in an intense recession through spring. Job cut announcements continued Monday. Home Depot Inc. said it plans to eliminate 7,000 jobs while closing four dozen of its smaller home improvement stores. Sprint Nextel Corp. said it is eliminating about 8,000 positions as it seeks to cut annual costs by $1.2 billion. The Conference Board's leading economic index is about 5.0 percent lower than its most recent peak in July 2007. Over the last six months, a separate Conference Board index has seen its largest decline since 1980.

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