• Two new reports on US economic indicators have confounded analysts’ forecasts.

Latest figures from the Commerce Department show that orders for durable goods – those designed to last over three years – fell 0.3% in May to $168.3 billion (€147.1bn; £101.2bn) after a 2.4% slide in April. Economists had been expecting a 1% increase.

Defence orders suffered the biggest tumble, sinking 13.8% following the end of the war. Excluding this sector, orders rose 0.3%.

Despite problems in manufacturing, the housing market has hit record levels. A separate report from the Commerce Department shows new home sales surged 12.5% to a highest ever annual rate of 1.157 million units. This time economists had been too cautious, predicting a rise of just 1.1%.

• In Germany, meanwhile, hopes of a second-half recovery were boosted by a rise in the closely watched business climate index of the Ifo economics institute.

The index – covering western Germany – rose from 87.6 in May to 88.8 this month, its second consecutive increase. The component measuring current conditions climbed from 78.3 to 79.4, while the expectations barometer rose from 97.2 to 98.6.

Such findings, says Ifo, suggest “a slight recovery will occur in the second half of 2003, offsetting the weak first half. Although no positive impulses are coming from the world economy, domestic demand appears to be strengthening.”

However, the institute believes overall economic growth across 2003 will be flat, and will only total 1.5% in 2004.

Data sourced from: multiple sources; additional content by WARC staff