Economic news mixed

Thursday, June 24, 2004 | 8:56 a.m.

WASHINGTON -- U.S. new home sales surged 14.8 percent in May to a record, boosted by job and income gains this year that have offset a rise in mortgage rates, a government report showed today.

The 1.369 million annual rate during the month compared with a 1.192 million pace in April, the Commerce Department said.

"There's a fence-sitter phenomenon where those who feel the best time to buy is passing and they jump in with both feet," said Richard DeKaser, chief economist at National City Corp. in Cleveland. "Clearly the job market is helping as well."

Separately, the agency said U.S. orders for durable goods unexpectedly dropped for a second month in May, suggesting a rebound in corporate spending is losing momentum, and initial jobless claims rose more than forecast.

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